Merrill Lynch: aQuantive 'Back On Track'

Merrill Lynch Tuesday maintained its "buy" recommendation on digital marketing company aQuantive after CEO Brian McAndrews reassured investors at a media conference in New York.

McAndrews said that, despite a slowdown in growth last quarter in its Atlas unit, and the departure of several key executives, the company has recently rallied. "We basically had to rebuild that infrastructure. The good news from our standpoint is that we have rebuilt it," he said at the UBS Global Media and Communications Conference. "The next phase will be to see actual results from the business, and we think we will in Q4, and we will next year."

The Merrill Lynch report said the tone of aQuantive seemed positive. "Atlas seems to be getting back on track," it stated. "We believe the company has a solid management team and business is progressing as usual excluding the blimps in Q3."

McAndrews also dismissed suggestions that competitor DoubleClick was stealing market share. "We believe that we continue to gain share," he said. "We have not lost any significant clients, so I basically think we've felt DoubleClick was a strong competitor, we continue to view them as such, and will continue to compete with them, but there's no shift as such that we've seen in the marketplace."

McAndrews also said Tuesday that aQuantive remains especially optimistic about its display ad revenues. He said that brand advertisers that are shifting their budgets from television to the Web are spending more on display ads than search. "They're used to television advertising," he said, adding that they "bring that sensibility online and spend more on rich media than search."

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