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Marchex Buys IndustryBrains

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NEW YORK Marchex said it has bought contextual ad firm IndustryBrains for about $31 million in cash and stock.

IndustryBrains will receive $15.6 million in cash and $15 million in stock, with $2.8 million of Marchex stock issued to IndustryBrains' employees who are joining Marchex.

The deal brings to Seattle-based Marchex, a search marketing service firm, a contextual advertising network that powers the paid listings on news sites like USAToday.com, Businessweek Online, The Motley Fool and Forbes.com.

New York-based IndustryBrains' advertisers choose which sites they appear on, as opposed to most contextual advertising networks, which require advertisers to run across large amounts of sites. While IndustryBrains sells to advertisers, it also allows its publishers to sell their own advertising.

A Marchex representative said the company plans to sell IndustryBrains' advertisers some of its search services, while it would use the IndustryBrains' distribution network as place for its clients to get qualified leads.

Marchex said it expects IndustryBrains to generate $4 million of revenue during the rest of 2005.