24/7 Media Courts Real Media Following DoubleClick Breakup

Just weeks after DoubleClick’s earlier efforts to acquire Real Media fell through, rival New York-based ad network 24/7 Media is throwing its hat into the ring as a possible buyer.

Sources close to the companies confirmed that 24/7 Media — an early player in the ad network business but a relative newcomer to third-party ad serving — is talking to Real Media’s parent, PubliGroupe, with an eye to closing a merger by next week.

Financial details of the proposed merger remain sketchy. Sources say 24/7 Media will issue about $1.8 million in stock to Real Media’s shareholders. Following the merger, PubliGroupe will retain a minority interest — about 15 percent — in the new company, and is expected to offer it additional financing.

Spokespeople from 24/7 Media and Real Media declined to comment.

Such a merger would give 24/7 Media control of OpenAdStream — Real Media’s ad serving software that had been sought by DoubleClick. According to sources, Lausanne, Switzerland-based PubliGroupe’s earlier talks with DoubleClick to sell OpenAdStream fell through after the industry leader bought the technology assets of yet another rival, L90. Efforts by PubliGroupe to raise its asking price, and DoubleClick’s vehement refusal, ultimately scuttled the talks.

More controversial still is the fact that a merger with 24/7 Media also would include the 1,100 sites formerly represented by Real Media — but which are now nominally under the management of Publicitas, a traditional sales agency owned by PubliGroupe.

That move would come as most of the large players in the space have made serious efforts to do just the opposite — to minimize their role in the online ad sales business, or exit it altogether. That’s true for DoubleClick, Engage, MediaPlex (now a ValueClick division), and, through its shift of sites to Publicitas, even PubliGroupe.

Additionally, 24/7 Media itself has reduced the number of media properties it manages. In August the company shut down its European ad network and rep business — despite having just moved those sites onto its Connect serving technology, which provides the back end for its network.

Still, some industry-watchers see some wisdom in taking on Real Media’s properties, which include Playboy.com, boston.com, Investor’s Business Daily’s investor.com and FastCompany.com. Such sites might eventually prove to be moneymakers, since they have well-known brands and potentially sellable audience demographics that mirror those of their related print publications.

Several online rep firms have long touted the benefits of the “branded” site as a more profitable way to sell online media than network deals. Interep’s Interactive division — which oversees Cybereps and Winstar Interactive Media — has been one of the loudest advocates for such thinking.

L90, too, is following suit, having recently returned to its roots as a media rep and ad network after it sold its adMonitor ASP to DoubleClick. Executives at the company say it’s poised to make a go of Web media sales, despite the mass exodus by other players.

Yet it’s certain to be a difficult road for both L90 and 24/7 Media. Phase2Media, a highly regarded New York-based ad rep similar to Interep Interactive, shut down earlier this year despite a concentration on selling well-known sites.

That could be why sources at 24/7 Media say a large portion of the Real Media Network — those that it doesn’t see as having a major brand — will be summarily dumped shortly after the acquisition.