AdForce Inc. (Nasdaq: ADFC) wants you --- to use its online ad server without worry that its sales force is swiping ad revenue. According to the company, this no-compete strategy will give Doubleclick (Nasdaq: DCLK) a run for its ad revenue.
Shares of the Cupertino, Calif. company began trading on May 7 and met with a warm reception on Wall Street, jumping 100 percent in its debut. The stock opened at $23 after the 4.5 million-share offering priced at $15 a share the night earlier.
ZDII spent some time with AdForce's chief executive Chuck Berger recently.
CB: We are a centralized ad management and delivery service that provides information to clients about the ads.
CB: We are comparable to DoubleClick's DART, without the ad rep business. That's all we have, we don't have a rep business.
24/7 (Nasdaq: TFSM) is one of our largest customers, one of our top four. AdSmart, GeoCities (Nasdaq: GCTY) , Netscape (Nasdaq: NYSE: AOL)are the others in the top four - the four make up about 75 percent of annual revenue.
CB: We just signed a 5-year deal with them, so that takes care of that concern on a fairly permanent basis. We are working with them to use the information we develop to help them better.
CB: First of all, realize what we do, for large sites, such as MapQuest, we set up the platform where the ads may be placed. They trust us to do the delivery and to provide them with customer information.
CB: We don't sell ads, but our technology allows 24/7 and AdSmart to sell space. Think of us as Nasdaq. We're not Merrill Lynch trying to get you excited about a stock so you'll buy and sell stocks, but we do handle the transaction once people decide to get into the market. We're like Inktomi is to search engines
CB: Because we provide technology for AdSmart and 24/7, we act as an OEM for the middle-sized companies, which they target. We are going after the larger sites, such as GeoCities, for example.
CB: We have future products, which we can talk about in about 20 days, which will do more with the numbers. We're working with Experian Corp., one of the largest database marketers.
Forrester and Jupiter follow the industry the closest. They calculated the online advertising market at $1.9 billion during calendar 1998. They forecast the market to be in the neighborhood of $4.4 billion by 2002.
CB: Any site that wants to join, may join. When they want to deliver an ad, they give us a URL. In a few hours they can put together a campaign, and a track the campaign immediately, even if it's a large site.
CB: No referral. We get a customer, that's enough.
CB: Every time we deliver an ad, on a CPM (cost per 1,000 impressions) basis, we just grow right along with them. It's completely scalable.
CB: Our biggest threat is DoubleClick, I would hope that they would they would say the same of us. They're our only competitor for ad serving, as far as we're concerned.
CB: To fund our growth, we do have equipment needs. There are no plans today, but if we did plan acquisitions we would have that in reserve.