Few other companies outside Google are capitalizing more on marketer dollars moving to the web than aQuantive. The company's revenue was up 55% and net income nearly doubled to $14.2 million or 16 cents a share from $7.6 million or 10 cents a share the year prior. The company said organic growth accounted for 42% of that revenue growth and also increased full-year guidance.
Shares in mid-afternoon trading were up $3.58, or 12%, to $33.29, on the news, from yesterday's closing of $29.71.
AQuantive's three businesses
AQuantive has three different types of business, which it calls digital-marketing services (Avenue A/ Razorfish and international agencies), digital-marketing technologies (Atlas and Accipiter) and digital-performance media (the drivePM network). Revenue at aQuantive's digital-marketing services division outpaced most analyst expectations, growing about 50% year over year.
On the call with analysts this morning, CEO Brian McAndrews touted the company's entry into the top 10 marketing organizations, as recently ranked by Ad Age, noting it was the first time a dedicated interactive organization had cracked the list.
"Last year we were ranked 13 and this year moved up to nine," he said later in an interview. "The other eight stayed exactly where they were. We're in the high-growth area and clearly marketers are moving money there."
May benefit from Google/DoubleClick
The company is also expecting strong growth in its Atlas division should the Google acquisition of DoubleClick go through, as it expects DoubleClick clients -- both ad agencies and publishers -- to have concerns about objectivity when the biggest ad-serving network is owned by the biggest interactive advertising seller. Agencies, he said, are counting on DoubleClick to give objective measurement and direction on where ad dollars are working best.
Mr. McAndrews said aQuantive would not join any challenges to the Google acquisition of DoubleClick, saying that "there are people with deeper pockets than us that have expressed questions and we'll let them fight that fight."
AQuantive's name has been thrown into the rumor ring more than a few times before and after Google's DoubleClick acquisition. The company would certainly be expensive for any propspective buyer; thanks to its large market cap any sale would likely be at least $3 billion, half the price of the No. 3 marketing services company Interpublic Group of Cos., and it may need to be broken up to fit within any of the major players in the space.
"We're a public company so anything can happen, but the reality is we're very focused on our clients and growing our business and growing as an independent company," Mr. McAndrews said, addressing the question of potential acquisition.
Areas of innovation
He said he's looking to web video and online ad measurement as two areas of major innovation in the next few years, particularly the way in which conversion credit gets attributed to online ads. Conversion credit should not just be assigned to the last ad impression, as it often is now, because in reality people see multiple ads along the path to conversion. Credit should be applied not only to the final search that led to the sale but also to the combination of ad events that led to it.
"Within Atlas and Razorfish are working on tools to measure that better," he said. "It'll be a significant change to way measurement is done."