ECOA Firms ReturnPath, Veripost Merge

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The e-mail change of address service provider market continued to consolidate Friday as Return Path and Veripost merged. The combined company, which will be known as Return Path, plans to integrate the technology of both entities into a single, standard ECOA platform for businesses and consumers.

Financial terms of the deal were not disclosed.

Though in the same business, Return Path and Veripost rarely competed with each other directly because they targeted different segments of the market. They were two of the three biggest firms providing ECOA. The third firm, ActiveNames Inc., which was established in 1998, went out of business in April. It used a permission-based service and featured an e-mail plug-in program that could be downloaded from its Web site.

The combined Return Path and Veripost will have more than 2 million consumer-registered address changes, 120 clients and 36 channel partners. The two companies plan to combine their technology platforms, particularly their list hygiene services.

Return Path will position Veripost as a consumer brand, retaining the Web site where consumers can register for the company's services. Eric Kirby, Veripost's CEO, will stay on the board of the combined company. Matt Blumberg, Return Path's CEO, will retain that title with the new company.

Tim Dolan, Return Path's vice president of marketing, said Veripost's services were becoming established with consumers, and the combined company plans to continue that trend.

"[Veripost] was starting to become a nice portal for consumer entry," he said. "There's no need to change that now."

The companies already are well along in combining their technologies, Kirby said.

"We're already far down the road in getting the technology integrated," he said. "There are some redundancies between the two companies. We anticipate only a handful of layoffs associated with this."

Blumberg said the aim of the merger is not only to turn the companies into an integrated unit, but also to achieve profitability as soon as possible.

"The goal of the combined companies is not just to be big and drive value for clients," he said, "but to be profitable. We hope to achieve profitability within two years."

The move enables the combined Return Path to firmly establish ECOA with both businesses and consumers, Dolan said.

"As separate companies we were struggling to move forward," he said. "This allows us to create an industry standard for ECOA."

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