• by Mark Walsh  @markfwal, November 19, 2007

ValueClick is still trying to settle an investigation by the Federal Trade Commission.

Tom Vadnais, the company's chief executive of online marketing, said Friday that the company is still in discussions, and offered no timetable as to when issues might be resolved.

During a conference call hosted by JPMorgan's Internet and Media group, Vadnais emphasized that ValueClick is working toward a resolution of the FTC probe of its lead-generation practices that has already impacted its business. "Our discussions are ongoing," he said. "They include telephone calls, the exchange of written materials, and face-to-face meetings, and we're hopeful this will be resolved soon."

ValueClick confirmed in May that it was under investigation by the FTC for violations of the CAN SPAM Act in relation to the lead-generation tactics of its Consumer Promotion Center subsidiary. ValueClick in October revised its third-quarter earnings forecast because of the toll the investigation was taking on its business.

Revenue for the third quarter reported earlier this month $157 million--an increase of $19 million, or 14 percent, over the year-earlier period. Net income was unchanged from a year ago at $16.8 million. Vadnais says the investigation is casting a cloud over its lead-generation business, with both advertisers and publishers skittish about running ads that might be considered questionable.

Vadnais said he sees little difference between the types of promotions people often get in their mailboxes at home and the kinds of offers presented online by ValueClick and others. "I would think the FTC's intent is to have this continue to be a media form online, but to set up some rules and bright lines that the FTC feels are fair and equitable for consumers," he said.

Once the FTC probe is resolved, Vadnais expressed confidence that the company could rebound in a matter of weeks. "We could very quickly resume activities on a full-fledged basis when we get the green light," he said.

Regarding the feeding frenzy of online media companies buying up ad networks over the last year, including Google's planned $3.1 billion acquisition of DoubleClick, Vadnais said the trend could benefit ValueClick as one of the few remaining independent ad networks.

"We think being an independent supplier--in that we're not competing with any publishers, and having advertiser data in our hands as opposed to that of some of the [Internet] portals--we think that's an advantage we could have in the future," Vadnais said, adding that some prospective clients have already inquired about switching to ValueClick's ad-serving platform because of conflict-of-interest concerns arising from the spate of mergers.

In terms of other media trends, Vadnais was less than bullish on expansion into mobile advertising. "I don't think it has the potential some other people do for advertising because it tends to be more of an incident device, where you go to it to get information and then go away from it," he said. "So it's not as attractive a device in my mind for advertising as the Internet, where you're sitting with a PC for a long period of time."

But he was more optimistic about social networking as an emerging ad arena. Vadnais said ValueClick was already looking at significant partnerships with some of the largest social networks, and envisions growing opportunity. "They've been high-inventory, low-monetization so far, but that will pick up over time and we'll be right in the middle of it," he said.