Spam Slows DoubleClick's E-Mail Business

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Spam continues to hurt DoubleClick's e-mail marketing business, the New York ad technology company said in reporting its third quarter results last week.


Revenue from DoubleClick's e-mail management and delivery business fell to $9.6 million from $9.7 million recorded in the same period a year ago. DoubleClick attributed the decline to marketers' concern that spam drowns out their messages and the growing use of targeting in e-mail campaigns.


The news tempered an otherwise robust quarter for the company, which reported $6.3 million in net income for the third quarter, a big turnaround from the $62 million loss of a year earlier. Revenue remained flat, growing incrementally from $74.6 million to $74.8 million.


During the quarter, DoubleClick said it sent out 2.2 billion e-mail marketing messages, down 24 percent from last year's third quarter.


In a conference call, DoubleClick chief executive Kevin Ryan said the e-mail results were "weaker than we hoped." He pointed to the company's efforts to support industry initiatives against spam to revive growth in e-mail marketing.


This was the second straight quarter of year-over-year contraction in the company's e-mail business. Last quarter, it brought in $9.2 million, down 7 percent from the same period a year earlier.


DoubleClick's ad management business returned mixed results. Revenue from its ad management products was $31 million, down 12 percent from the year-ago period. While overall volume was up 18 percent, effective pricing fell 17 cents. DoubleClick attributed this to its decision to focus on serving large-volume clients, such as eBay, which pay lower prices but represent a better profit opportunity than smaller sites paying higher prices.


"We continue to see a modest upturn in both marketing spending and confidence in our customer base," Ryan said.


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