• The Wall Street Journal, Wednesday, May 23, 2007 11:30 AM

In the wake of the high-profile acquisitions of competitors DoubleClick, 24/7 Real Media and aQuantive, it's no surprise that ValueClick, one of the last big ad networks still standing alone, has seen its stock shoot-up. Investors may believe a buyout and a big pay day are on the horizon, but the spotlight is on the company, which means that several of its practices are coming under intense scrutiny.

One of these, the Consumer Promotion Center, generates customer leads through the use of aggressive promotional packages. The newspaper uses the example of a $300 package that includes a dozen different products, from monthly shipments of wine, to a free phone subscription from Vonage, to a free laptop computer. When a customer received everything but the laptop, valued at $1,100, he filed a false advertising report with the Better Business Bureau. The Federal Trade Commission is now investigating lead generators Consumer Promotion Center, which gain business for their clients through the use of promotions touting everything from flat-fee product packages to "free iPod" and "free Xbox360."

In a regulatory filing, ValueClick confirmed that it was part of the investigation, but investors don't seem to care. After initially falling on the news, its stock hit a 52-week high on Monday, as speculation of a possible acquisition heats up. What investors aren't considering is how repellent federal investigations can be to would-be buyers.

Read the whole story at The Wall Street Journal »