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Excite@Home spinoff seeks new home

Enliven, one of the pioneer developers of attention-grabbing Flash advertisements, is struggling to find a new owner, according to sources close to the company.

Enliven, one of the pioneer developers of attention-grabbing Flash advertisements, is struggling to find a new owner, sources close to the company said Friday.

The Waltham, Mass.-based company, which was spun off from now-defunct cable Net access giant Excite@Home early last year, has been aggressively courting buyers since December to no avail. The company is in its third round of acquisition talks with several suitors, including online ad network DoubleClick, according to one source familiar with the sale attempts.

Scott Kliger, interim CEO of Enliven and founder of the technology, said he could not comment on acquisition talks but added that the company is not in danger of folding. The company, he said, is always discussing strategic partnerships with other companies in the industry.

"Online advertising has been in a period of consolidation, and I would not be shocked to see further consolidation," said Kliger, also founder of Cambridge, Mass.-based investment firm Sage Hill Partners. "We talk with all the players in the space about various partnerships we can form."

DoubleClick could not immediately be reached for comment.

Enliven creates tools for advertisers and agencies to easily deliver and manage advertisements built with Macromedia's Flash animation technology, a platform growing popular with Web sites and promotions. The company is also known for its system that tracks response to Flash ads, giving marketers a picture of how consumers interact with the ads including length of time and areas of most interest. Kliger said the company is about to win a patent for the ad-tracking technology.

The trouble comes as rich-media advertising draws more acceptance among online publishers, which have struggled to convince marketers that Web ads work. Animation, audio and video are becoming common tools advertisers use to stand out from the clutter. Rich-media ads from the likes of Unicast, Eyeblaster and United Virtualities' Shoshkele are drawing experimentation and acceptance from the industry, analysts say.

Jim Nail, senior analyst at Forrester Research, said companies specializing in rich-media advertising are starting to get more buzz because of the technology's ability to encourage interaction and capture more details about response. But he said Enliven may have been ahead of the curve and instead of reaping the rewards of that position, it now finds itself in a competitive market.

"Enliven's problem was that they were way ahead of their time, with this idea of having ads which you interact with as opposed to click through to. They were one of the early adopters of Flash as an advertising technology," Nail said.

"This stuff has been around since 1996, and now marketers are finally saying, Let's put interactivity into ads," said Nail, adding that likely buyers could include Macromedia, DoubleClick or Avenue A. "Are any of these (rich-media) companies doing well by profit? No. Are they starting to get serious attention? Yes."

Like many in the online advertising business, Enliven has struggled to make ends meet during a severe downturn in the ad market. Several Net ad companies have been forced out of business, including ad-serving technology company MatchLogic, also previously owned by Excite@Home.

Enliven, run by about 20 people, dodged a bullet last year when it was spun off from Excite@Home, which had purchased the technology as part of its 1999 acquisition of Narrative Communications.

Excite@Home planned to sell Narrative in early 2001 along with MatchLogic. Instead, Kliger's investment firm took it private in 2001, taking the technology's name, Enliven, as a corporate moniker.