InterAd Holdings, the pan-European Internet ad sales house, has been effectively taken over by US sales network 24/7 Media.
24/7 has agreed to acquire a 60 per cent stake in the company held by German publishing company Rundfunkmedia Rundfunkprogrammanbieter-und-Werbe in a deal valued at $4m (2.4m).
The deal means that InterAd Holdings, formed following a walkout of staff from London-based sales house Softbank last February, becomes an effective subsidiary of the US sales house. 24/7 is estimated to be second in the US market to DoubleClick in the reach and volume of ad inventory.
The sales house will be renamed 24/7 Media Europe Network. The network represents 238 million impressions per month on 64 individual sites. It expects to announce a number of additions to its roster of clients, including UK client wins, over the coming weeks.
Gordon Simpson, chief executive of InterAd Holdings, says the takeover vindicates the vision of InterAd’s founding team in developing a pan-European network despite the high set-up costs. It is estimated the company’s losses in the first year of operation are over 1m.
The company’s founders are thought to have sought a suitor because of the unwillingness of its main German backer to continue to invest heavily in establishing the network.
Simpson says that despite the established track record of US sales networks in developing ad revenue streams on the back of growing Web traffic, it remains far more difficult to convince European investors to match US funding.
“In theory, with Europe following the same growth curve as the US, it should be as easy to raise capital for online ventures in Europe as it is in the US. But we are only now seeing investment groups beginning to wake up to the opportunities,” he says.
International ad sales network DoubleClick has signed a three-year renewal to handle domestic, international and local ad sales for search engine AltaVista, owned by computer giant Compaq.