DoubleClick Takes Stake in ValueClick

In a move to broaden its range of advertising products, Internet advertising network DoubleClick today said it paid $85 million for a minority stake in ValueClick, a rival Internet advertising firm.

DoubleClick made the investment in order to build its business in the so-called click-through market, where advertisers pay each time a site visitor clicks through a banner ad.

DoubleClick sells space on popular sites like ComedyCentral.com, charging advertisers according to the number of people who visit the page on which an ad appears. ValueClick, on the other hand, has a network of 11,000 Web sites that deliver smaller audiences than DoubleClick's affiliated sites; it charges on a click-through basis.

The deal comes at a crucial time for ValueClick, which filed for an initial public offering last October; DoubleClick's VP of acquisitions, Jeff Epstein, says the deal won't affect those offering plans. ValueClick will put DoubleClick's investment toward acquisitions, as well as toward the development of other performance-based advertising offerings to complement its cost-per-click model.

Epstein says the company is considering further investments in other low-revenue, high-volume areas, such as bulk advertising, in which advertisers buy a pre-set number of consumers, and barter advertising, in which companies swap ad space.

The investment in ValueClick will make it nearly impossible for anyone else to acquire the company. DoubleClick now owns 30 percent of ValueClick, with an option to buy another 15 percent of the firm at any point in the next 15 months. As part of the deal, DoubleClick gave up $75 million in stock and $10 million in cash.

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