DoubleClick may be up for sale

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Marketing services company explores options after missing earnings estimates

DoubleClick last week announced it has hired Lazard Freres & Co. to "explore strategic options."

The direct and interactive marketing services company said in a statement that those options include a sale of part or all of its businesses, a recapitalization, an extraordinary dividend, a share repurchase or a spin-off. DoubleClick declined to comment for this story.

While DoubleClick has an $800 million market value and its third-quarter net income was $15.4 million, up from $6.3 million a year earlier, it has missed earnings estimates two quarters in a row.

"The outlook for them, it seems, isn't so bright," wrote Gary Stein, a JupiterResearch analyst, in his blog, calling the company "QuadrupleClick."

That wasn't always the case. "Most of their acquisitions were smart," said Eric Schmitt, an analyst at Forrester Research. "They had a real eye for picking out undervalued companies."

Unfortunately, Schmitt said, "there isn't a single buyer. They have more business models than Ohio had electoral votes."

Schmitt said the DoubleClick board had concluded "the whole was worth less than the sum of the parts." Some of those parts could be worth quite a bit.

"The Abacus business is probably the single most valuable line of business there," Schmitt said. "It's doing well in terms of revenue and profits." He said possible suitors include infoUSA, Experian and Acxiom.

DoubleClick's search division is also attractive, Schmitt said. "Given the market for search, they can easily flip Performics back out and get what they want for it," he said.

"They may just sell Abacus and DART, the ad serving business, and keep the rest intact," Schmitt said. "If they go for a complete yard sale here, then the SmartPath MRM software might be worth something."

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