CMGI Enters European Market Through ADTECH AcquisitionFRANKFURT/ANDOVER, MA - CMGI, a network of Internet companies, earlier this month made its first international acquisition, buying an 80-percent stake in ADTECH, a German-based pan-European Web company.
CMGI owns more than 50 companies and claims to be the largest, most diverse network of Internet companies in the world. The network includes both CMGI operating companies and synergistic investments.
The firm has been on a buying spree for months, making three acquisitions late last year when it bought Adforce Inc., Flycast Communications and yesmail.com.
Adforce is the key to ADTECH since the Germans have had a technology license agreement with the US firm for two years. ADTECH will be folded into Adforce, a CMGI statement said.
"The ADTECH acquisition and merger with AdForce is yet another step in our ongoing strategy to solidify CMGI's competitive position in Europe and the international Internet marketplace at large," said David Andonian, CMGI president for corporate development.
Although CMGI inherited a number of European offices through its various acquisitions, this is its first direct engagement in the European Internet market and will allow even closer cooperation between ADTECH and Adforce.
The two companies have worked together since ADTECH was founded in January of 1998 and jointly developed the US firm's adserving software for the conditions of the European market.
"ADTECH will take over all of Adforce's European activities and thus achieve a leadership position in Europe as a vendor of Adserving solution for Web site managers, agencies and Internet marketers," an ADTECH statement said.
"We're becoming Europe's leading outsourcing firm," said ADTECH co-CEO Michael Stusch. "We're a company established in Germany but with a pan-European outlook. This year we plan to open offices in London, Paris, Barcelona and Copenhagen.
"Actually we are already active in Scandinavia and are market leader in Switzerland through out connection to Tingier, the largest media company in that country."
Unlike rivals DoubleClick and 24/7, Europe ADTECH does not engage in any marketing activities. "We only deliver the technology needed to plan the best advertising campaign on a Website and to measure results.
"To that extent we don't really compete with the two American companies, except in those regions where DoubleClick sells technology, not marketing or media planning. We don't do that.
"We offer the technological basis for e-commerce. We allow trade on the Web to happen. When a client has bought our services he can measure everything and doesn't have to worry about anything but his content."
Current European e-commerce market volume is about $3-$400 million, Stusch said, but cited Forrester and Jupiter studies that project a European market the size of the current US market by 2002.
"You have to take this market seriously. It is going to grow massively this year."
ADTECH is hooked into the Frankfurt Metro Area Exchange (MAE), one of the largest in Europe, and that "puts us in the heart of the European Internet."
He conceded that Amsterdam is mounting a challenge with its own massive Internet infrastructure, but maintained that Frankfurt is building a huge Tele center that will be hard to challenge.
Most Americans, he added, still make the mistake of locating in the UK first because they understand the language, "but then they hop across the channel and don't understand anything."
ADTECH will handle that problem through a high tech, Frankfurt-based call and information center. "We can already answer questions in English, Swedish and Danish, and will add the other major European languages."
Personnel will be highly trained and able to move quickly to help clients on site if needed.