Online Direct Marketer Silver Carrot Acquires Milesource

An online direct marketer has purchased a consumer loyalty-incentive program that boasts a million-member rewards site on the Web.

New York-based SilverCarrot Inc. bought Milesource to add to its growing stable of direct marketing and promotions online, said SilverCarrot CEO Allan Levy. Terms of the deal were not disclosed but Levy said it was a cash transaction.

SilverCarrot uses promotional offers to assist advertisers interested in using online marketing to achieve goals. More than one billion email impressions are generated a month and membership is added at a little more than one million monthly, Levy said. SilverCarrot has more than 10 million consumers in its database.

According to SilverCarrot’s website, consumers use the Internet to interact directly with an advertisers - website and branded gift site run by SilverCarrot. The consumer receives notification of winning an award, selects a gift from a branded site and then goes to the advertiser’s site to complete the process. Radio Shack, CitiBank, AT&T WorldNet, Net2Phone and Orbitz are among SilverCarrot’s advertisers since the company started in July 1999.



Milesource, also based in Manhattan, started business in February 2000 and became profitable by Q1 2001. It has designed and run rewards programs for Barnes &, The Gap, Dell, Staples, 800 Flowers and Wal-Mart. Consumers gain points - two points for every dollar spent at an advertiser’s website - that can be redeemed for products and services that include free flights, vacations and merchandise. Milesource’s slogan is: “More Rewards. More Ways To Get ‘Em.”

Levy said SilverCarrot’s acquisition of Milesource will strengthen its existing services and add Milesource’s shopping, games and promotional activities online. He said that the online sites of SilverCarrot and Milesource can be linked and customers driven to the Milesource site.

Milesource senior executives and sales staff are now working at SilverCarrot’s headquarters in Manhattan’s Garment District. But he said that little would change from the consumers’ end.

”Our strategy is to leave all the good things in the company in place,” Levy said. “From the consumers’ point of view, nothing will change.”

The combined companies’ database includes more than 100 data points, including gender, Zip code, income, number of children in the household, how many computers are in the house and other lifestyle questions. Data comes from the United States and Canada. Levy said the Milesource acquisition means a lot of positives for advertisers.

”We can offer them more media, better targeted media,” he said. “And we can offer a better reach for our Milesource advertisers.”

Levy said SilverCarrot, which has seen a 400% jump in revenues in 2002 compared to last year, is in the market for more acquisitions. He confirmed the company was in discussions with two other companies, although it’s too early to know whether an acquisition deal will be sealed.

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