CMGI acquires ad firm Flycast

The Net venture fund is building its online ad business with this $690 million stock deal, the company's third in two weeks.

Feb. 6, 2002 8:16 a.m. PT

2 min read

ANDOVER, Massachusetts--CMGI, an Internet venture fund, agreed to buy online advertising agency Flycast Communications for about $690 million in stock as the company builds its online advertising business and gains customers such as auctioneer eBay.

CMGI will exchange 0.4738 a share, or $47.53 apiece, for each Flycast share. That's about 25 percent more than yesterday's closing price.

It's the third online advertising-related transaction in two weeks for Andover, Massachusetts-based CMGI. Analysts say CMGI, which owns stakes in online companies such as Yahoo and Lycos. Advertising is one of the biggest and most profitable sources of revenue for Internet-related companies.

"We have the ability to move about half the current business that DoubleClick is doing over the CMGI family" of online advertising companies, said Dave Andonian, president of business development at CMGI.

CMGI agreed last week to buy AdForce for about $500 million in stock, gaining its 300 Web site customers. Engage Technologies, an Internet marketing company controlled by CMGI, agreed on Friday to buy AdKnowledge for $193 million.

DoubleClick gains about 40 percent of its revenue from AltaVista, the Internet search service that's majority owned by CMGI. CMGI's Andonian said today that the company will honor its contracts with DoubleClick. Still, CMGI's recent purchases make it capable of handling its own online advertising services, he said.

Flycast provides 1.4 billion advertisements on 1,200 Web sites every month. Its advertisers include ETrade Group and iXL Enterprises.

CMGI said it expects the acquisition to be complete in January, and that a "significant percentage" of Flycast shareholders have agreed to vote in favor of the acquisition. CMGI didn't disclose the percentage.