Flycast Strikes $11M Deal for InterStep

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Online ad network Flycast Communications began acting on its plans to build a new e-mail division last week by purchasing digital marketing firm InterStep, Cambridge, MA, in a stock deal worth more than $11 million.


InterStep, which was founded primarily as a technology play, charges high-end clients such as the Washington Post and Newsweek Interactive for e-mail delivery and management services. San Francisco-based Flycast plans to offer the services to smaller e-mail publishers who join its e-mail ad network, and in turn let marketers advertise on the publications much as it now lets e-tailers run ads on the Web.


"Our real purpose here is to build our e-mail network and use [InterStep's] capabilities to get people to join the network," said Larry Braitman, Flycast co-founder and executive vice president of the new division, dubbed eDispatch.


Flycast delivers banners across a network of about 1,000 Web sites, charging marketers a commission on any sales it generates. The company expects to take a higher commission for e-mail marketing.


"It helps us get to profitability faster because it's a higher-margin revenue stream for us," said Braitman, who added the company is still hammering out details on pricing for the service. Flycast lost $11.4 million on revenue of $11.1 million in the first six months of this year.


The company plans to debut three more initiatives in the first half of next year: Flycast Permission Marketing, E-mail Marketing Management Services and Customer Relationship Management Solutions.
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