WPP to Acquire 24/7

NEW YORK WPP Group said it would acquire online ad company 24/7 Real Media in a $649 million deal.The acquisition, which values 24/7 Real Media's shares at $11.75 each, would bring WPP various digital advertising assets. In addition to a strong search-marketing business, 24/7 Real Media operates an ad network that sells space for 950 publishers. It also has a publisher-side ad server, helping sites like Forbes.com and USAToday.com present and track ads.The acquisition is a departure in that it will enmesh WPP deeper into the publishing and technology business. With 24/7 Real Media's network, WPP will control ad inventory, while the server brings a technology component holding companies have traditionally lacked. "This adds a third dimension," WPP CEO Martin Sorrell said in a conference call. "There are three legs: creativity, media and last but not least the application of technology." The deal follows Google's purchase of 24/7 Real Media competitor DoubleClick for $3.1 billion. AOL yesterday scooped up another competitor, Ad Tech, to add to its Advertising.com unit. While 24/7 Real Media's technology is geared for publishers, it could help WPP develop an ad server for its agencies, WPP Digital CEO Mark Read said. "We're working through plans for how we can deploy that technology on an agency facing basis," he said. WPP is paying a net of $637 million in cash, with 24/7 Real Media bringing $37 million in cash and $49 million in unvested stock options. 24/7 Real Media CEO David Moore will continue to lead the company. WPP said 24/7 Real Media would continue to operate as a stand-alone business, running as part of the WPP Digital arm. WPP also intends the new unit to work with its Group M media shops and Kantar consulting firm. "This is around developing media and technology platforms we can use across WPP," Read said. While 24/7 Real Media sells advertising to many agencies, the combination will lead to WPP's competitors to buy media from the unit. "We don't anticipate any issues of our ability to sell our networks to agencies other than WPP," Moore said. "Agencies are after the best interests for their clients."Adweek late last month had reported that WPP CEO Martin Sorrell was eyeing 24/7 Real Media as he sought his own "MySpace moment," akin to the boost News Corp. got when it acquired the social networking site. The acquisition is the first major deal for WPP Digital. The new unit has made a series of investments in emerging media companies, including local TV ad platform Spot Runner, video ad network VideoEgg and mobile search business JumpTap. 24/7 Real Media has a strong search marketing business, particularly in Asia, where it operates a joint venture in Japan with Dentsu. Overall, 61 percent of its revenue comes from outside the U.S. market. 24/7 Real Media's international reach made it attractive. "24/7 gives us a good presence in Japan and Asia as a whole," Sorrell said.

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WPP to Acquire 24/7

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