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FastClick Files for IPO
Some say its starting to feel like 1999 all over again. The online advertising market, fueled by revenues from search engine advertising, is booming (Forrester Research expects online ad spending to increase from $6.6 billion in 2003 to over $15 billion by 2008), and venture capitalists and investment bankers are starting to take notice. In November 2004, FastClick, which runs an Internet advertising network, raised $75 million in venture money and in December, filed for a $92 million IPO.
FastClick currently buys and sells ad space on more than 7,500 Web sites and works with advertisers to optimize their ad campaigns. FastClick uses sophisticated proprietary technology that bases ad placement on the subject of a Web site, the geographical location of the person viewing the add, the speed of the user’s Internet connection and the time of day. Ads appear in separate windows, move across the screen, appear between Web pages when a user clicks or link, or may simply appear as a banner at the top or side of a Web page. For the first nine months of 2004, FastClick reported operating income of $4.68 million on revenues of $39 million.
FastClick hopes to use some of its IPO proceeds along with the venture funds it previously raised to move into the search engine advertising arena, where it will confront Google and Yahoo, the two leaders in that market. Other competitors include Advertising.com (acquired by America Online for $435 million in June 2004), and ValueClick.
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