• by Ross Fadner , February 11, 2004

FindWhat.com's merger with its European pay-for-performance counterpart Espotting.com will give the online pay-for-performance solutions provider a global reach, and should help it become more accessible to agencies. Both companies operate bid-for-position, pay-per-click, keyword-targeted advertising services, and together, they will account for more than three billion monthly searches across three continents.

Under the terms of the transaction, Espotting will become a subsidiary of FindWhat.com. Operations at each company will remain separate.

FindWhat CEO Craig Pisaris-Henderson notes that at the closing of the deal, the FindWhat network will cover the largest volume of searches of any company to date. Pisaris-Henderson expects that the combined group will have established relationships with more than 100,000 online businesses globally, from a variety of sectors, through thousands of different distribution partners.

Currently, FindWhat's main distribution partners are CNET's Search.com, Excite, Webcrawler, Metacrawler, Dogpile, and Microsoft's Internet Explorer Autosearch.

With Espotting, FindWhat will have operations in the U.K., Germany, France, Spain, Italy, and Scandinavia, as well as Japan (based on a previous partnership with Mitsui).

Dan Ballister, VP-sales, FindWhat.com, said that creating a global network and establishing better relations with the interactive agencies are top priorities this year.

Search has been the fastest growing sector of online advertising for at least a year. "One of our biggest challenges will be to show the agencies that we are a must-buy," says Pisaris-Henderson. He uses the analogy of a traditional agency with a TV budget, which doesn't limit its spend to ABC, NBC, or CBS--agencies buy across the board, and also target smaller niche audiences on cable. "It's critical for marketers to understand the quality of your traffic," he says.

Pisaris-Henderson notes that the U.S. operation stands to gain a lot from the merger with Espotting from an advertising-relations perspective.

Espotting has had stronger agency relations, and has succeeded in attracting bigger advertisers. In fact, Pisaris-Henderson concedes that FindWhat had only made agency initiatives a focus as of the second quarter of 2003. The merger may also boost brand awareness for FindWhat.

"While the financial impact of the Espotting acquisition is uncertain, FindWhat is clearly trying to establish itself as a global player," said Jeff Lanctot, vice president media, Avenue A. "Still second tier, to be sure, but a company that is capitalizing on the paid search boom of the last year. As the big three (Google, Yahoo and Microsoft) fight for supremacy, FindWhat seems comfortable followingalong in their wake," he added.

FindWhat has not revealed its revenue per click, and has provided scant information about Espotting's outlook, according to a Dow Jones wire report.

FindWhat stock closed yesterday on the Nasdaq at $17.30, down $2.14.