ValueClick Announces Changing Of The Guard

With its white-hot stock leveling off and its chances to be picked up possibly thwarted by an FTC probe into its lead-generation business, ValueClick yesterday announced a changing of the guard.

Tom Vadnais, president of U.S. operations, was named chief executive officer--succeeding James Zarley, who becomes executive chairman, but one with day-to-day "worker bee" operational duties.

In a conference call with analysts, Zarley said he will get more involved in scoping out acquisition candidates for ValueClick, and anticipates assisting Chief Administrative Officer Sam Paisley with the integration of at least one new deal before the end of the year.

Zarley, who has been CEO since 1999, insisted the move has "absolutely no connection" to the FTC investigation announced with a May 16 letter. He said the company has complied with the FTC's request and has heard nothing since. But the company won't be looking to buy anything else in the lead-generation space.

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ValueClick is looking for accretive deals to enhance its affiliate marketing, search, and comparison shopping capabilities, Zarley said.

"We're not going to sit back and wait to see if someone's going to take us out," Zarley said. "We think we have a lot of future in front of us."

Vadnais has been a ValueClick board member since 2001 when the company acquired his firm Mediaplex. He has been managing the Mediaplex and affiliate marketing businesses, and will continue to do so.

Zarley said he will continue to manage the media and international businesses, during a transition period.

Valuation expectations in the online advertising sector have been inflated by the recent eye-popping multiples--most recently Microsoft's $6 billion purchase of aQuantive, at an 85% premium over the stock's trading price.

Zarley acknowledged that ValueClick's size and the recent runup in its valuation puts it "out of the ballpark for all but a few players." The latest speculation has paired ValueClick with Yahoo.

At the same time, prospective acquisition candidates have developed oversized expectations. "We try to get them over that and back to reality in the first meeting," Zarley said.

"I think it's too early to tell how it will all unfold," Vadnais said. "We're one of the last ones standing to be an independent."

ValueClick stock, which was up 1.33% to 33.44 at the New York close, fell 2.48% to $32.61 in after-hours trading.

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