An online interep-tion

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Few observers of the online ad sales and technology business have been surprised to see DoubleClick step in to scoop up the assets of ailing competitors. Although it suffers from its own ad-slump-related problems, the company is still the clear leader in its troubled field.

But another company, Interep Interactive, an offshoot of a radio rep firm, has also been quietly picking up properties and is poised to become a more prominent player in online advertising sales.

Last week, the two companies came together to pick at the carcass of Real Media, which PubliGroupe, the Swiss media company, has been trying to sell in parts. PubliGroupe stated its concerns about the performance of the unit early last month.

Though there were signs late last week that plans to sell the technology business to DoubleClick and the online sales business to Interep might unravel, the course set by Interep to focus on online ad sales, and by DoubleClick to emphasize its technology offering (see related story this page), demonstrates that the two companies may become emblematic of an online ad sales and technology business that is splitting in two. Most players, like Interep, will focus on one area of expertise, and the company believes online ad sales can be a good business as a technology-agnostic play that operates much like ad sales in traditional media.

With the possible acquisition of both Real Media's online sales business and former 24/7 Asian property Mezzo Marketing, Interep has added to a string of purchases of sequentially more well-known properties (see chart). Since the beginning of the year, Interep has snatched up: Cybereps, for which Interep originally provided seed money; financial sites specialist Perfect Circle Media; and Winstar Interactive Media, a unit of Winstar Communications, which has been operating under Chapter 11 bankruptcy protection since April.

By eschewing the growth-at-all-costs modus operandi of the Internet's IPO heyday, and aligning itself with its parent company's strength in selling radio, Interep Interactive hopes to flourish as a packager of both Internet-only and cross-media deals. "We are a sales and marketing team first and foremost," said the unit's President-CEO Adam Guild. The company worked with Heineken USA on a cross-media alternative music program last summer with MP3.com.

The son of Interep Chairman-CEO Ralph Guild, the younger Mr. Guild thinks he can repeat history successfully with his purchases. In 1981, his father began to consolidate radio rep firms under a corporate umbrella, which today encompasses such major players as ABC Radio Sales and Infinity Radio Sales. "Everybody thought he was nuts," Adam Guild said.

"We're fundamentally different" from rivals, said Adam Guild. "We're not a venture-funded company." Each of the properties within Interep Interactive operates separately, while gaining efficiency on the back end.

It helps that Mr. Guild can buy properties on the cheap. Though Interep hasn't disclosed what it paid for any of its buys, public businesses in the sector have been massively devalued. 24/7 Media had a market cap last week of about $7 million.

"The really successful Internet sales organizations are tied in with a traditional media property," said Richy Glassberg, senior VP-ad sales for News Corp.'s racing property Speedvision. Mr. Glassberg, whose Web ad sales firm Phase2Media folded in June, expressed disappointment that a proposed union of Phase2 and Interep earlier this year fell apart. "It's exactly what we tried to build," he said.

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