[DoubleClick + L90] = Interesting News Item

[sbrew]

L90 To Buy DoubleClick's North Amer Media Business

LOS ANGELES -(Dow Jones)- L90 Inc. (LNTY) signed a definitive agreement to acquire DoubleClick Inc.'s (DCLK) North American Media business for 4.8 million shares in the consolidated company, to be called MaxWorldwide.
DoubleClick holds a right to receive an additional $6 million in future payments contingent on certain performance conditions.

In a press release Monday, L90 said DoubleClick's 4.8 million shares in MaxWorldwide represents 16.1% of the new company, as well as $5 million cash.

Nasdaq-shares of L90 closed Friday down 1.1%, or 1 cents, to 94 cents.

[Czar]

Well, that's good news for DoubleClick's publishers...not!

It had been suggested for some time that DoubleClick was prepping its media business for sale - not just because it was becoming a decreasingly significant slice of the company's revenue pie, but due to the cues exhibited by DoubleClick's sudden decision to allow almost any site into their audience network.

Still, selling the unit to L90 (who have perhaps the worst rep of the major online ad agencies in a world increasingly skeptical of those companies who fail to report their revenues correctly) could be the beginning of the end for both groups.

Meanwhile, DoubleClick will be rubbing their hands in glee. Not only do they get to dump media, but the deal reportedly requires L90 to continue using DART as the platform on which the network will be driven, so in addition to the stock, cash and performance bonus, DCLK will continue to clean up in tech fees.

0.01. I'll be back with the other after I've read a bit more into this.

[jokearound]

no no no no no nononononooooooooooooo!

i never worked with L90, but the horror stories are getting me quite scared about this..

[ValueAd]

Amazing. where this is all going? Anyone?

[sbrew]

L90 had to do something. They're still recovering from the accounting improprieties, but have been sitting on a lot of cash for a while.

This acquisition, combined with the cash position, and the name change (to MaxWorldwide) will give them a fresh start as the dominant player in the online media sales space.

I've been impressed with the new leadership at L90. They knew they needed to change the way people perceived them. This is a good step in that direction.

I wish them all the best in it.

-Scott

[ValueAd]

DoubleClick technology really suffer. Poor dart architecture hitting them on huge IT cost.
They are taking this deal to buy some time and redo the technology from scratch. I knew this was coming.
Watch out for doubleclick technology now.

Vlad Kogan
ValueAd.com

[Czar]

Well, my thinking is this:

DoubleClick's happy to let go of a dog - especially with no definite end in sight to the online ad spending slowdown.

L90's desperate to change their name and reinvent themselves, but simply doing so would seem as though they're trying to hide something.

Acquiring DCLK's media biz gives L90 a position of market dominance in terms of network-based online ad reach, which gives it a viable excuse to change its name, fill its starved management ranks (you may recall the mass executive exodus of earlier this year) with respected DoubleClick names and relaunch with the same sort of promises that gave AOLTW big publicity in media circles through 2000 and early 2001.


Worst case scenario:

Upon completion of the acquisition, MaxWorldwide will launch a massive PR/trade campaign noting its superiority in negotiating cross-media placement, and in possessing the ability to profile, target and brand more accurately and efficiently than competing networks as a result of their greater reach and DoubleClick technology. They'll portray themselves as a one-stop shop for online media buys, direct marketing solutions and product tie-ins. And you can almost be assured that a number of large agencies will give them a go based on this 1999 notion. They'll then find out that DCLK's audience network has degraded to the point at which it now resembles almost any other broad-based online ad network in terms of publisher quality and placement, and only the laziest of media buyers will be able to justify the added expense and decreased ROI of working with an over-hyped media shop such as this instead of a mid-sized network. Earnings will fail to live up to expectations, clients will leave, the big-three portals will get richer, and MaxWorldwide will become yet another name on a tombstone in the dot-com graveyard.

Of course, there is a flip-side possibility that creating a single online media agency with reach comparable to none but the largest portals will find sufficient support from the big brands so as to carve out a market for itself. Still, with AOL and Yahoo both cozying up to Hollywood, and all three of the biggies comfy with the consumer brands, just how much of the pie remains unaffiliated is hard to gauge.

May be a case of wait-and-see, but I still won't be signing my dusty old DCLK contract.

[Anion]

http://www.internetnews.com/IAR/article.php/1379241


Hope I won't start making negative money

[kryton]

Originally posted by Czar
May be a case of wait-and-see, but I still won't be signing my dusty old DCLK contract.

What is wrong with signing the contract? You are able to break it with a months notice. And just not giving them impressions would break it. Or am I missing some hideous clause in the contract?

I don't see what is wrong with just staying with them for as long as they pay. If you keep an eye on defaults daily, you shouldn't run into problems. The only thing I don't like about DC is that they spawn so many pops.

[Anion]

Doubleclick is a basketcase company on par with cyberrebate, theglobe.com and enron. It has no tangible business aside from adserving, which less and less people are being beguiled into using (who would pay doubleclick $0.50 cpm for adserving when ads now sell for $0.30?). Their numerous attempts to expand into other markets failed miserably - Doubleclick mail, Diameter market research and @plan just bombed. Their saving grace was the acqusition of tradional direc marekter, Abacus direct - which they used their now worthless stock to pay for.


I made over $50,000 by shorting their stock (made $15,000 shorting L90's a few years back).

[cyrex]

While marketcap might be to big, I don't agree they are on par with cyberrebate, theglobe.com and enron, etc..

Originally posted by Anion
Doubleclick is a basketcase company on par with cyberrebate, theglobe.com and enron. It has no tangible business aside from adserving, which less and less people are being beguiled into using (who would pay doubleclick $0.50 cpm for adserving when ads now sell for $0.30?). Their numerous attempts to expand into other markets failed miserably - Doubleclick mail, Diameter market research and @plan just bombed. Their saving grace was the acqusition of tradional direc marekter, Abacus direct - which they used their now worthless stock to pay for.


I made over $50,000 by shorting their stock (made $15,000 shorting L90's a few years back).

[Anion]

DC has no tangible real business so I can't see it succeeding in the long term.