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Euro RSCG Buys Black Rocket

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A little more than a year after its courtship of Citron Haligman Bedecarré collapsed, Euro RSCG has found in Black Rocket the creative acquisition it has been seeking in San Francisco.

Best known as Yahoo!'s agency, Black Rocket was founded in 1996 by John Yost, Bob Kerstetter and Steve Stone, veterans of S.F. hot shops Goodby, Silverstein & Partners and Hal Riney & Partners. Besides Yahoo!, the agency now handles clients such as Musco Olives, MTV International, The Body Shop and several Condé Nast magazines, including Wired.

Significantly smaller than Citron, Black Rocket has about $100 million in billings and 25 employees.

"Their billings are up. ... Their clients are good. It was the right time," one source said of the deal. "They'll manage to make a profit because they did this at their peak. They did something smart—sell when they are on top."

Details of the acquisition, including the price tag, were not immediately available. The agency will be renamed Black Rocket Euro RSCG.

"We have a great admiration for the way Bob, Steve and John have developed and run the agency for the past five years," Bob Schmetterer, chairman and CEO of Euro RSCG Worldwide in New York, said last week. "Euro RSCG has a long history of acquiring great agencies with strong management teams and letting them continue to run their show."

In a statement, Yost said the move "will help us take our clients' business to the next level on a global basis. This partnership will help us create a new kind of advertising agency: global, yet stealthy. We'll be able to provide our clients with fully integrated platforms on a worldwide basis."

The move follows Euro RSCG's 1999 acquisition of San Francisco direct response specialist Cohn & Wells, renamed a.k.a. Euro RSCG.

Some sources pointed to the state of the ad business in the Bay Area as a possible reason for the timing of the Black Rocket acquisition. "There's been a sudden evaporation of the business base," one source said. "The small indies and midsized shops are not going to be able to continue business without merging. We had an artificial economy that's imploded and everyone is cutting their advertising."

The "Do you Yahoo!?" campaign literally made Black Rocket. Launched in April 1996, it was the agency's first work. Its offbeat humor helped turn a then-unknown Web portal into one of the most successful brands on the Internet.