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DoubleClick, Abacus merge in $1.7 billion deal
By Courtney Macavinta
November 24, 1999, 12:40 p.m. PT
Internet advertiser DoubleClick and market researcher Abacus
Direct have won shareholder approval to merge in a deal estimated to
be worth $1.7 billion, bringing together droves of consumer marketing
DoubleClick, which delivers ads for more than 1,500 Web sites,
has been making acquisitions to secure itself at the top of the
online advertising game. In July the company acquired rival
NetGravity in a stock transaction valued around $530 million.
Privacy groups have been trying to derail the merger with Abacus
on grounds that it could increase the likelihood of corporate abuse
of customer data. The deal brings together data on Web surfing habits
obtained from the 5 billion ads DoubleClick serves per week and the 2
billion personally identifiable consumer catalog transactions
recorded by Abacus.
Under the deal, approved yesterday, DoubleClick will issue 1.05 of
its common shares for each Abacus share, which is approximately 10.5
million shares. Based on DoubleClick's closing price of $158 on
Monday, the transaction is valued at approximately $1.7 billion,
according to the company. The combined market capitalization of the
two companies is approximately $8.8 billion.
The companies aim to allow marketers in both media to target
potential customers more efficiently. They have vowed to continue to
disclose their data-collection practices and to give consumers a
choice to "opt out" of their databases.
"The merger with Abacus Direct, along with the recent closing of
the NetGravity merger, will allow us to offer publishers and
advertisers the most effective means of advertising online and
offline," Kevin O'Connor, DoubleClick's chief executive, said in a
Still, the privacy implications of the deal will likely be closely
monitored by the Federal Trade Commission, which earlier this
month examined online profiling, a growing trend in which firms piece
together Net users' personal information and surfing habits to target
them with advertising and new services.
The FTC isn't expected to throw road blocks at the merger because
of privacy concerns, however.
"We have no grounds to challenge the merger based on privacy
concerns. We and the Department of Justice evaluate mergers based on
competition issues," an FTC staffer said today. "We're not looking at
the Abacus-DoubleClick merger specifically, but we are interested in
these privacy issues in general and are sensitive to the concerns."
-- Janelle Prevost, November 24, 1999