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Digital Impact agrees to buy MarketLeap

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San Mateo, Calif.—E-mail marketer Digital Impact announced Monday it has agreed to acquire MarketLeap, a San Francisco-based search engine marketing services company.

The deal gives Digital Impact a significant foothold in the search engine space.

Digital Impact had begun testing search marketing earlier this year. CEO William Park told investors in April that the company was planning to launch a search marketing service in the second half of this year as a complement to its e-mail marketing business. MarketLeap provides search engine optimization, paid inclusion and pay-for-placement services for marketers.

Under the terms of the agreement, Digital Impact will acquire MarketLeap’s outstanding equity for $1.5 million in cash and 1.25 million Digital Impact shares and options. MarketLeap owners will receive up to 200,000 additional shares of Digital Impact stock if certain revenue objectives are met.

MarketLeap co-founders Noel McMichael and Paul Owen will remain at the company and report to Michael Gorman, senior VP-search marketing at Digital Impact.

—Carol Krol

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