A week after reporting that its non-financial ad revenue--driven by larger brand advertisers--was booming, TheStreet.com purchased interactive marketing services company Corsis Technology Group for $20.7 million. A prime jewel in the Corsis arsenal is venerable online agency Promotions.com, which Corsis acquired quietly from NBC Universal during the past few months.

With that purchase from NBCU, Corsis appeared to be phasing out its own brand name as it had announced, with a redirect still on its Web site last week, that the firms would now operate as "one company under the Promotions.com name." However, during a conference call with analysts, TheStreet.com CFO Eric Ashman said he expected both Corsis and Promotions.com to "thrive as independent brands in the marketplace."

Begun in 1996, TheStreet.com has long been one of the more successful subscription-based Web services. But the Corsis acquisition "accelerates the shift in our revenue towards the advertising side of our business," said Ashman. Indeed, TheStreet.com has now changed its 2008 revenue projections--advertising and advertising services will account for more than half of the company's revenues, he noted--up from an original projection of 45%.

The saga of Promotions.com also began back in 1996, when it was founded as Webstakes. The name was changed to Promotions.com in 2000, and two years later, iVillage acquired the business for a net $3.5 million. The property came under the NBC Universal umbrella when that media giant bought iVillage last year.

No official announcement of Promotions.com being sold to Corsis was ever made. In a March 26 press release this year, Corsis referred to Promotions.com as a joint venture of Corsis and NBC Universal, with its clients including NBC/iVillage. Then, in TheStreet.com's announcement of its purchase of Corsis--which emphasized Promotions.com--NBCU had mysteriously disappeared from the picture.

A call to Corsis to determine when and for how much the company had acquired Promotions.com from NBC Universal was returned by a representative of TheStreet.com, who could only acknowledge that NBCU was not involved by the time it purchased the agency. An NBCU spokesperson confirmed that Promotions.com was "recently sold." The reason? "It was not core to what iVillage does."

TheStreet.com, on the other hand, "needed this core competency," Clarke said--since more than half of the RFPs that TheStreet.com now receives from advertisers include interactive components--which Corsis' competency in such areas as games of chance, social networking, mini-sites, and other brand promotion areas will capitalize on.

Clark cited three reasons for buying Corsis rather than just continuing as a client: 1. The importance "that we own this core competency" 2. "We also want to own the customer relationship" 3. "The speed of delivering the campaigns--we want to own it internally, because it will drive improved margins."

Ashman noted that TheStreet.com will now be able to charge higher CPMs, and Clarke pointed out that the deal also gives "gives us a diversification play...will facilitate our acquisition and growth plans" and "gives us the ability to launch new services quickly and effectively."

Also on March 26--a day when Corsis announced that Kraft Foods had granted it agency of record status--TheStreet.com said that former iVillage executive Steven Elkes had been named to the new position of chief revenue officer and executive vice president, mergers and acquisitions. During the conference call, Clarke singled out Elkes for congratulations in bringing the Corsis "acquisition to a successful completion."

This and other interweaving connections between NBCU/iVillage, Corsis/Promotions.com and TheStreet.com did not go unnoticed on Friday. For example, a poster on the Alarm Clock blog pointed out that "a quick scan of Corsis on LinkedIn shows that most of the top brass worked at iVillage."

According to SEC filings, iVillage is in the midst of a five-year technology outsourcing agreement with Corsis that expires in Aug. 2010. Under the terms of this agreement, iVillage is paying Corsis more than $2.5 million a year for these services.

Two weeks ago, TheStreet.com reported record revenue of $14.9 million in the second quarter, an increase of 20% over the same period in 2006. Ad revenue was up 48%, to $5.5 million--including a rise of 206% in non-financial ad revenue, which the company noted now represents 39% of its total ad revenue, up from 19% a year earlier. Subscription revenue rose only 2% in the quarter, to $8.6 million--with revenue from other sources, primarily syndication, rising 197% to $0.8 million.

Ashman said that Corsis has annual revenues of $10 million.

Also on the non-financial ad front, TheStreet.com is developing www.mainstreet.com, designed to provide "mainstream news in the context of its impact on one's financial life." Expected to launch in early 2008, the site will have an ad-sponsored revenue model, unlike subscription-based TheStreet.

In addition to iVillage and Kraft, other Promotions.com clients include McDonald's, HSBC, Publicis Groupe, Digitas, Hearst and CondeNast.

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