Co-op Databases Gain on Abacus as DoubleClick Explores OptionsThough DoubleClick's Abacus Alliance cooperative database, launched in 1990, remains the industry's largest with 1,600 business-to-consumer participants in the country, its competitors have steadily grown. However, it is unlikely that any would consider buying Abacus from the company.
DoubleClick Inc., New York, said Nov. 1 that in order to achieve greater shareholder value it had retained Lazard Frères & Co. to explore strategic options. Among the options cited were "a sale of part or all of its businesses, recapitalization, extraordinary dividend, share repurchase or a spin-off."
DoubleClick would not comment further on the possible sale of Abacus, but the industry buzz is that hundreds of potential suitors have stepped forward. DoubleClick acquired Abacus in a $1 billion all-stock agreement in 1999.
Meanwhile, Abacus' competitors continue to focus on their own cooperative databases.
The co-op database scene seems to have a new No. 2 player in I-Behavior, Harrison, NY, which launched in 2000 and now has 1,025 participants. Though she would not comment on Abacus directly, I-Behavior president/CEO Lynn Wunderman spoke in general terms about the prospect of two co-ops merging.
"Investors generally don't see a good fit in terms of combining two co-ops because you have a lot of overlapping clients," she said. "It's not like you're going to double their spending, so it doesn't make financial sense."
Wunderman does see continued growth opportunity for co-ops based on the lack of new names in the traditional list world.
"You have to believe that what's happening is that the co-ops are gaining share in the addressable list market from vertical lists because they're not growing as quickly," she said.
Next in the co-op lineup is NextAction, a database started in 2002 by a group of former Abacus employees. The database launched in January 2003 with about 200 catalog participants. It now has 850 titles and is adding services as well.
"We add about 20-25 new members a month, and we are doing more with leveraging the product," said Karen Crist, vice president of sales and marketing at NextAction, Westminster, CO.
NextAction is fully operational in activation services for house files, she said, and members will start receiving what the firm calls core knowledge reports in May. The reports will consist of market study, market share and seasonality information.
As for catching up to Abacus, Crist said NextAction is not focused on that.
"The numbers are good and that's one part of the story but another part is retention," she said. "We just had an advisory board session, and we heard that clients were either keeping their circulation flat or they were growing it. Nobody was cutting back."
Unlike Abacus, NextAction does not work with clients having fewer than 10,000 names.
"Not that we think there's no value in it, but the biggest issue is the quality of data when you get lower than that, and we want to make sure our data is nice and clean," Crist said.
Crist noted that clients are accepting of the multiple co-op environment that has developed in the past several years. On average, clients use three co-ops, she said.
The second-oldest cooperative database is Experian's Z-24 catalog co-op, established in 1991. It has 674 participating titles. The company's publishing co-op, CircBase, has 160 participants.
Experian recently introduced two new Z-24 models and awaits results, Experian spokesman Matthew Besler said.
"The Focus Model identifies prospects based on their product-purchase history, and the Precision Model identifies prospects based on their catalog-purchase history and seasonality activity," he said.
Catalog co-op Prefer Network, New York, launched in 2001 and is owned by Catalog Marketing Services, St. Paul, MN. Prefer Network CEO Doug Platt did not return calls for comment. The company's Web site claims the database has more than 400 participants.
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters