By William Fellows
DoubleClick Inc, the 900lb gorilla of the internet advertising industry will be free to pursue any of some 50 acquisition prospects it has identified in June by using its $6bn market value and $371m cash. Under SEC regulations DoubleClick, which went public on Nasdaq in February last year, must wait until June until it can make acquisitions it will account for as a pooling of interests. At that time it will be free to use its huge valuation – DoubleClick shares were down $23 at $148.50 yesterday – to make acquisitions by swapping its stock for that of its prey. The company has given Jefferey Epstein responsibility for acquisitions and strategic investments.
The New York company reported a first quarter net loss of $6.9m including a $1.62m charge for relocating, up from $4.42m on revenue up 69% at $22.08m compared with $13m. It hit the majority of analysts’ expectations on the nose. International revenue from 80 sites was $4.9m, or 16% of total revenue. Gross margins are 54.3%.
DoubleClick says it has extended its strategic agreement with Compaq Computer Corp’s AltaVista search engine and is now accounting for AltaVista revenue on a commission basis as a percentage of system revenue. Total system revenue of $31.14m turns into $22.08m of actual reported revenue once the difference of around $9m is paid to Compaq. It claims customer winbacks against all of its competition including 24 clients from NetGravity. DoubleClick, which now accounts for its billings as ‘system revenue’ expects to be serving 100 billion ads a month to web surfers by the end of next year, up from the 8.2 billion it served last month. The company expects to roughly double the number of ads it serves every six months. It claims 675 web publishers are now customers of its Dart ad delivery system. Dart revenue was up 44% and now accounts for 23% of revenue and half of gross profit. It’s pushing 500 million ads a month through its closed loop system launched at the end of last year which offers real-time control of ad delivery and measurement, and expects that figure to double next month. The closed loop technology has 30 customers including Dell.
