Be Free Buys Personalization Firm For $169M

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Be Free Inc. yesterday announced plans to acquire personalization software firm TriVida Inc. for stock valued at roughly $169 million, a move the company hopes will help it convert more of the consumers it reaches through its online affiliate programs.


But the company went to lengths to clarify the way the combined company will differ from online ad network DoubleClick Inc., which has been barraged by bad press this month about how it protects -- or fails to protect -- consumers' privacy.


Be Free, Marlborough, MA, helps cybermerchants link to and manage networks of affiliated Web sites whose content is relevant to the products those merchants sell. For example, Be Free might put a pet retailer's ads on Web pages dedicated to specific breeds of dog. The Web page gets a cut of any sales that result. So does Be Free.


TriVida, Culver City, CA, makes technology that analyzes historical consumer profiles and real-time online data, then predicts which ads will be get the best reaction from specific consumers on the Web.


Tom Gerace, co-founder and executive vice president of business development at Be Free, summarized the company's business model as a factor of how many merchants it works with, the number of consumers it reaches, and how well it converts those consumers into buyers. Until now, the focus has been on reach, he said.


"With our TriVida acquisition, however, we've begun to focus on the second variable of that equation. That is the conversion factor," Gerace said. Ideally, better customer analysis through TriVida will generate more effectively pitched, online advertising across affiliate networks.


Gerace called TriVida's technology the most "robust and effective personalization technology on the market" -- a claim that is, incidentally, made in some form or another by essentially every personalization technology firm.


Meanwhile the company was careful to separate itself from the ongoing furor surrounding DoubleClick, a New York firm that has caught fire from privacy advocates concerned about its practice of matching supposedly anonymous consumer data gathered online with personal information gathered offline.


"Be Free and TriVida are very, very conscious of the privacy issue, and we intend to be the leader in the right kind of personalization. That is anonymous user personalization," Gerace said.


He added that neither Be Free nor TriVida correlate anonymous profiling information with any personal data such as names, addresses, e-mail addresses, Social Security numbers or credit card numbers.


Be Free's claim that it is beginning to focus on conversions is seemingly at odds with statements it made last year when it announced software designed to streamline the way Web page builders join affiliate networks. At that time, Gerace said Be Free's historical strength was conversion, but the new software -- called BFAST 3.0 -- would improve its reach.


Gerace explained the apparent discrepancy by saying the personalization and analysis technology Be Free will get from TriVida puts the company's ability to convert on an entirely new scale than it could manage before with its own technology.


"It's the difference between incremental changes and a sort of revolutionary technology. We really believe that TriVida is the perfect technology for online personalization," he said.


Meanwhile, Be Free announced a two-for-one stock split and released its 1999 financial results. The company's loss of $17.8 million last year was considerably steeper than the $4.8 million it lost in 1998, but less severe than stock analysts' predictions. Revenue grew in 1999 to $5.3 million, up from $1.3 million the year prior.
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