ValueClick Makes Bigger Commitment to E-Mail

ValueClick continued its acquiring ways Friday, agreeing to buy e-mail marketing services company Hi-Speed Media in a deal worth at least $9.5 million.

The deal is aimed at beefing up the Westlake Village, Calif.-based company’s e-mail marketing capabilities. The diversified online advertising company already collects opt-in e-mail names for its Ultra Leads offering, and offers e-mail technology through its Mediaplex subsidiary. Still, e-mail hasn’t been a big part of its business thus far.

“This is another step into the e-mail space,” said John Ardis, ValueClick’s VP of digital direct marketing and corporate strategy. “Our goal is to build out our suite of services so markers can come to us to solve their problems.”

Interestingly, the deal is contingent on the passage of the federal Can Spam act, which Congress has sent to the White House for a signature and President Bush has indicated he would sign. That’s because Los Angeles-based Hi-Speed’s main business is e-mail list rental — a business that’s threatened by the tough California anti-spam bill that the federal legislation will over-rule.

Hi-Speed has more than 40 million consumer profiles, which include e-mail addresses, gathered through co-registration deals. Only about half of those are used for mailing, however, because the others are suppressed due to unsubscribe requests. Although co-registration and list rental are practices often associated with spammers, ValueClick says it’s thoroughly checked out Hi-Speed’s list gathering practices and they passed muster.

“Clearly the last thing ValueClick Inc. wants to do is to be the next poster child of spamming. We’ve spent a lot of time with these folks and digging into their operations,” said Ardis. “It’s truly a legitimate file. They send the kind of messages consumers want to receive in a frequency that is not overbearing. As a company, we couldn’t afford to get involved with it otherwise.”

Hi-Speed Media’s clients include Equifax, LendingTree.com, United Online and InsuranceWeb. Hi-Speed President Farshad Fardad will continue to head up the business, reporting directly to ValueClick CEO James Zarley.

The purchase is in line with what Zarley told investors in the company’s last earnings call in October. At the time, he made not-so-subtle hints that ValueClick was looking for attractive acquisitions.

ValueClick has been built largely through acquisitions. Most recently, the company purchased affiliate marketing player Commission Junction in a $58 million cash and stock deal that closed earlier this week.

It has been a busy week for ValueClick. The company Tuesday raised revenue guidance for the year and promised a bright 2004. Those predictions, however, didn’t take into account the Hi-Speed Media acquisition, so the company will likely have to revise its numbers yet again.

The deal is subject to customary closing conditions but is expected to close shortly after the Can Spam act receives the President’s signature.