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ValueClick buys marketer Commission Junction

The online ad technology company agrees to buy the privately held affiliate marketer for about $58 million in cash, another sign of consolidation in the online marketing business.

ValueClick on Friday said it agreed to buy privately held Commission Junction for about $58 million in cash, another sign of consolidation in the online marketing business.

Westlake Village, Calif.-based ValueClick, a public company, provides technology and services for companies to advertise online. Santa Barbara, Calif.-based Commission Junction specializes in "affiliate marketing," in which it manages relationships between Web publishers and advertisers as they promote sales leads to one another. For example, eBay affiliates get a cut of sales whenever they drive business to the online auctioneer.

Under the deal, ValueClick will fold Commission Junction's business and customers, including its eBay part, into its own affiliate network, Be Free.

"The acquisition of Commission Junction would double the size (of Be Free) and is the latest example of ValueClick's ability to execute on our strategy of being a single-source provider of technology, media and services for digital marketers," ValueClick CEO James Zarley said in a statement.

Affiliate marketing is as old as the commercial Internet, but companies like Commission Junction and Be Free emerged during the dot-com heyday to function as intermediaries between major sites and marketers. They manage customized networks of partner sites and provide detailed accounts of the effectiveness of links between advertisers and publishers.

Affiliates are paid based on the number of leads they provide to partners like eBay and MSN. The business is one of the most effective ways to promote the $95 billion annual online retail business, according to the National Retail Federation's Shop.org.

ValueClick's Be Free subsidiary powers the affiliate marketing programs of more than 200 online and multichannel retailers, including Best Buy, CitiFinancial, Staples and Travelocity. With Commission Junction, ValueClick adds the company's marketing program, CJ Vantage, and its clients, including MSN, Overture Services and Quicken Loans.

Commission Junction is backed by Idealab and Thomas Weisel Partners, among others.

The board of each company has approved the transaction, which is expected to close in November 2003, subject to customary closing conditions and regulatory approvals.