24/7 Confirms It's For Sale
- by Gavin O'Malley @mp_gavin, May 11, 2007
24/7 reported a net loss of $56,000 for the first quarter, and adjusted earnings per share of $0.08--three cents off analysts' expectations. Additionally, the company reported a 34% rise in revenues for the quarter to $57.7 million, which was also short of analysts' forecasts of $59 million.
Recent news reports have predicted the potential sale of 24/7 to ad Giant WPP Group for $600 million, or to Microsoft for as much as $1 billion.
Confirming that 24/7 is "assessing strategic alternatives," Jonathan Hsu, the company's executive vice president, chief operating officer and chief financial officer, said: "The significant increase in corporate activity in the digital marketing sector has opened new doors for us, creating opportunity."
Google's planned acquisition of 24/7 rival DoubleClick for $3.1 billion has many analysts predicting industry consolidation. Since that deal was announced, 24/7's stock has risen nearly 30%.
As further evidence of consolidation, Yahoo just paid $680 million for the 80% of online ad exchange Right Media that it did not already own.
Speculation continues about the fate of other online ad firms, including aQuantive and ValueClick, as well as smaller, niche players jockeying for attention.
In its earnings report, 24/7 also noted the opening of its first Asian office in Seoul, South Korea, through its joint venture with Dentsu.
"We are positioning 24/7 Real Media to be a significant beneficiary of the strong growth that is projected over the upcoming decade for many markets throughout Asia and the Pacific Rim," said David Moore, chairman and chief executive officer of 24/7 Real Media. Additionally, 24/7 said it expected second quarter pro forma earnings per share of between $0.09 and $0.12, compared to analysts' estimate of $0.13. Its full-year earnings per share forecast of $0.52 to $0.55 tops analysts' consensus estimate of $0.52.
