In another sign that Internet ad companies are bulking up in order to survive, Softbank Holdings has sold its 65 percent share of Softbank Interactive Marketing, a firm that sells advertising for Web sites, to Zulu-tek.
Terms of the deal, which closed December 31, 1997, were not disclosed. Softbank Holdings is the U.S. holding company of Japan-based Softbank, which reorganized its U.S. properties after its stock fared badly in the Japanese stock market.
Zulu, formerly known as Netmaster Group, brings cash, as well as new ad-banner technology from its subsidiary echoMedia, to Softbank Interactive, one of the three largest Internet ad sales firms. Softbank Interactive, which has been in the ad sales business for years, launched an Internet ad network this past September.
"We start the new year with new owners that bring to us tremendous enthusiasm, capital to significantly expand our sales force, and, most synergistically, an ownership position in echoMedia, which has state-of-the-art banner technology to implement in the next couple of months," said Softbank Interactive CEO Caroline Vanderlip, who will continue running the company in its latest incarnation.
EchoMedia's technology can detect what operating system and connection speed visitors to Web sites are using, so that they can be served the most appropriate ad banner for their configuration. For example, it can serve video clips to those with high-speed connections.
The sale of Softbank Interactive, which had been on the market for about two months, punctuates a rush of mergers and consolidation among ad sales and technology firms.
The previous week, the largest and best-known ad network, DoubleClick, filed to raise $32 million in an initial public offering.
On a side note, Internet advertising auctioneer Adbot, recently closed its doors after its founder was accused of propping up the money-losing operation with investor funds from another venture.
Softbank Interactive Marketing's sales force will market echoMedia's technology to ad agencies and their advertisers. The new venture also will offer CD-ROM advertising, sponsorships, and other forms of interactive advertising and e-commerce technology to build back-end transactions systems.
Softbank's new owners will boost the company's sales force of 35 by more than 20 percent, the companies said. Ronald Meatchem, Zulu's chairman, will become chairman of Softbank Interactive, replacing Andy Batkin, who has left the company.
Zulu and Softbank Interactive said their combined December sales were $7.1 million. Together the two firms provided services to more than 1,000 advertisers last year.
EchoMedia's customers include AltaVista, Bellcore, Daytimer Technologies, Kodak, Prodigy, Symantec, United Airlines, and USA Today. Softbank Interactive represents Netscape, ZDNet, HotMail, and Playboy Web sites.
In addition to echoMedia and Softbank Interactive, Zulu's subsidiaries include Netz-Autotrak, which has a Web-based automotive industry tracking system.