AOL to Acquire Advertising.com

NEW YORK America Online said on Thursday that it has signed an agreement to acquire interactive marketing services provider Advertising.com for $435 million in cash. The transaction is expected to close in late summer, subject to regulatory approvals.

Advertising.com works with more than 800 advertisers to optimize the performance of online marketing campaigns. The company also works with some 1,500 online publishers by providing a large customer base for their available advertising inventory and by licensing its ad serving technologies. Advertising.com operates the industry’s largest third-party advertising network, reaching more than 110 million visitors monthly and over 70 percent of all U.S. Web visitors, according to comScore Media Metrix in May 2004.

The company acquires ad inventory from Web sites, search engines and e-mail publishers and uses a proprietary technology to segment and allocate the inventory based on criteria such as lead generation, customer acquisition or product purchase. Advertising.com revenue increased almost 80 percent in 2003 to $132 million; and 2003 income from operations was $12.1 million.

Combining AOL’s advertising inventory with the Advertising.com network will provide advertisers with an “unprecedented opportunity to reach more than 140 million Internet users, and will enable AOL to offer advertisers an expanded suite of customized solutions, including branding, paid placement, and multimedia delivered on a CPM or performance basis,” AOL said in a statement.

Advertising.com will remain in Baltimore and be managed as a separate company reporting to Michael Kelly, president of AOL Media Networks. The company has more than 300 employees at operations in the U.S., the U.K., France, Germany, Norway, Sweden and Denmark.

—Adweek staff report