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Harte-hanks is on an acquisition and alliance spree designed to boost its digital direct marketing capabilities.

In recent months, the San Antonio-based direct marketing company has announced three Internet-related acquisitions and entered into strategic alliances with several other companies.

The strategy is based on Harte-Hanks' belief that, to take advantage of the fast-developing Internet, it's better to link up with already successful companies than start from scratch.

The latest addition to the Harte-Hanks stable is ZD Market Intelligence, La Jolla, Calif., which it agreed to buy from Ziff-Davis for $101 million in cash.


ZD Market Intelligence, formerly known as Computer Intelligence, provides database products for the high-tech and communications industries. The sale is expected to close by mid-October.

Earlier this year, Harte-Hanks bought two smaller companies: Spectral Resources, Woodstock, N.Y., and Lynqs Newmedia, Kansas City, Mo.

Spectral Resources develops interactive software aimed primarily at the pharmaceutical industry. It provides promotional multimedia programs, economic analysis and sales training systems. Lynqs, another software developer, creates Internet and intranet software for online marketing communications.


Harte-Hanks' alliances with BroadVision, Communique Direct, Digital Impact, E.piphany and net.Genesis Corp. also expand its digital portfolio:

nBroadVision supplies e-business applications for relationship management.

nCommunique Direct, a response management company, specializes in serving high-tech businesses.

nDigital Impact offers e-mail marketing services.

nE.piphany provides Web-based customer relationship management software.

nNet.Genesis provides e-business intelligence software.

"Extending into [the Internet] is very natural for us," said Richard Hochhauser, president-chief operating officer of Harte-Hanks. "It is somewhat self-evident in that the Internet is just another way of looking at direct marketing."

Mr. Hochhauser said Harte-Hanks views the Internet as moving too fast to develop new technology entirely from scratch. Therefore, it has embarked on an assertive campaign to buy or join forces with existing companies.

"Our goal is to serve our customers, and if we can provide our customers with a better set of tools, we are going to do that," he said.

Harte-Hanks is concentrating its new capabilities in the Harte-Hanks Interactive division.

Norbert Lempert, president of the new division, said the parent company likes to see a business making money before it tenders an offer.

"If you're able to show success in today's marketplace, the chances of showing success in the future are much greater," Mr. Lempert said. "The focus here is on direct marketing. And that focus will continue. As long as technology allows different forms of that to evolve, we're going to evolve with it. And we're going to be at the head of the pack."


Harte-Hanks has a tradition of reshaping itself. The company was started in the mid-1920s when two West Texas newspapermen joined forces and created a small chain of local papers. During the 1970s and '80s, Harte-Hanks went on a buying binge and developed a media empire that, at its peak, included four TV stations, 35 daily newspapers and nearly 100 smaller papers.

Earlier this decade, Harte-Hanks began to sell off its newspaper and TV holdings to focus on direct marketing.

Last year, Harte-Hanks had operating revenue of $748 million. The company expects its newest acquisition, ZD Market Intelligence, to have about $50

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