• by Ross Fadner , December 10, 2003

Multipurpose digital marketing services provider ValueClick completed its acquisition of Commission Junction Tuesday, prompting it to increase anticipated revenues for the fourth quarter of 2003 as well as fiscal year revenue projections for 2003 and 2004.

The addition of Commission Junction moves ValueClick to the top of the affiliate marketing heap, firmly establishing them as the largest provider of technology and services to support what has emerged as one of the most effective methods for enabling online retail commerce.

Affiliate marketing is already a $95 billion industry, and according to Forrester Research, it is expected to grow to $230 billion by 2008.

In accordance with the Oct. 10 announcement, in which ValueClick stated their intention to acquire the tech marketing solutions provider, Commission Junction will be combined with ValueClick affiliate marketing subsidiary Be Free. The combined Be Free and Commission Junction division will offer affiliate marketing technology and services as well as a full suite of search marketing services, including site optimization, paid inclusion, and keyword management.

Search engine marketing, which is also exhibiting enormous growth potential, is often compared with affiliate marketing in terms of its cost-effectiveness at generating online sales and leads. Jupiter Research forecasts its expansion from a $1.6 billion industry in 2003 to a $4.3 billion industry in 2008.

Commission Junction's acquisition and subsequent integration with ValueClick affiliate Be Free has prompted the marketing services provider to reevaluate their fourth quarter and 2003 financial guidance, and to provide initial projections for 2004.

ValueClick anticipates total revenues of approximately $27 million for the fourth quarter, which includes one month's operation of Commission Junction, an increase of $2 million over prior guidance, and an approximate 44 percent increase in revenue over Q4 2002. For the fiscal year 2003, ValueClick expects total year revenues between $89.5 and $90 million. Early fiscal year revenue projections for 2004 anticipate $134 to $138 million in total revenues.

"We have an optimistic view of 2004," understated James Zarley, chairman and CEO of ValueClick, "and expect to further establish ValueClick as the single-service provider of Web, email, affiliate, and search marketing solutions for digital marketers."

In conjunction with the Commission Junction announcement, ValueClick also announced the addition of Jeff Pullen as general manager of Commission Junction/ Be Free, who expressed his pleasure in a press statement with the "wealth of talent" in the combined teams, noting that they have come together "quickly and collaboratively."

CEO Zarley cited the Commission Junction acquisition as a good fit for ValueClick's current products and services portfolio, and further noted that the integration of these new elements will be key in providing advertisers with a single source for their online marketing needs.