Webgravity beefs up its offering with Deal Group

A leading search engine optimisation specialist and an affiliate marketing specialist are in the final stages of negotiating a merger.

Webgravity, the search engine specialist, is AIM-listed. The company should this week complete a reverse takeover of Deal Group Media, a private company which owns UKaffiliates.

Webgravity’s listed name on the stock market is IBNet, which merged with Webgravity in 2001. IBNet floated in 2000 at the height of the dot-com bubble. It specialised in so-called Web-spidering technology, which checks the content of millions of websites daily. IBNet billed itself as an online detective agency and hoped to generate interest from the marketing community because of its online brand protection service.

But IBNet’s expensive product wasn’t perceived as a must-have and the company suffered a cash crisis. Its merger with Webgravity was seen as a way to offer synergies between two distinct areas, but it quickly became clear that Webgravity was the dominant player.

As search engine optimisation became more important, IBNet became invisible, although its technology was offered by Webgravity as an added-value part of its own service.

Deal Group Media published its annual results earlier this year, showing turnover of &£7.5m and profits of more than &£500,000. It expects to close the Webgravity deal this week, subject to shareholder approval.

Affiliate marketing, whereby websites use a commission system to promote other sites, has grown steadily over the past three years and is now a favourite of online retailers. Deal Group Media claims to have been the first entrant into this market when it launched Ukaffiliates in 1999. Its two biggest rivals today are TradeDoubler and Commission Junction.

Deal Group Media also made early moves into the cost-per-thousand and cost-per-click online advertising model. Adam Black, brand and communications director at Deal Group Media, says the Webgravity deal will “make us the only full-service performance-based online marketing agency in the UK.” He adds: “We will be focusing on areas that maybe haven’t reached their full potential on the IBNet side.”

Adrian Moss, chief executive of Deal Group Media, says having a listing on the stock market “is a very good step to becoming a major player in the consolidation that is sweeping our industry. The past two years have been a fallow period, but things are now moving very quickly. The addition of IBNet-Webgravity will give us massive power in the sector.”

Deal Group Media also has offices in Spain and Australia.

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