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Internet ad firm Doubleclick mulls sale

Internet marketer DoubleClick Inc., which is suffering from pricing pressures from online advertisers, said it had hired Lazard Freres & Co. to evaluate options that could include a sale of the company.
/ Source: Reuters

Internet marketer DoubleClick Inc., which is suffering from pricing pressures from online advertisers, said it had hired Lazard Freres & Co. to evaluate options that could include a sale of the company.

DoubleClick, a provider of software to Web publishers and advertisers, said late Sunday it would also explore a recapitalization, spin-off, share repurchase, or extraordinary dividend as part of the process.

The decision comes just two days after DoubleClick, based in New York, warned its fourth-quarter earnings would fall short of Wall Street expectations, sending it shares down 8 percent to $6.36.

The company provided no additional comment or details.

Formed in 1995 to sell advertising on the still infant Web, DoubleClick became a stock market darling during the dotcom boom and in 2000 boasted a share price in excess of $100 per share. But as online advertising dried up and several Web firms fell by the wayside, the company was forced to lay off staff and shed certain assets.

While revenue and profit growth are both now back on the upswing, the company has been pinched on prices by its clients, despite a spike in online advertising.

Any potential sale of the company would probably not be simple. In addition to its Web technology units, DoubleClick boasts an off-line business named Abacus, which provides direct markers with database services, competing with Acxiom Corp. and others.

The company’s data operations have generated more than one-third of its overall revenue so far this year.

Despite its growth, that operation is expected to generate little interest from the online advertising providers that would bid for the company’s software units, and would likely need to be sold separately.

DoubleClick’s two primary competitors in the online space are aQuantive Inc. and the smaller ValueClick Inc. , but both have also seen their share prices suffer recently.