FreeShop.com Reinvents Itself as Aptimus

Following an announcement in which it said it would miss analysts’ revenue expectations, FreeShop.com on Monday divulged details of its new network strategy, and said it would change its name — to Aptimus Inc. — to reflect that strategy shift.

The new approach calls for Aptimus to distribute its clients’ offers across a network of Web sites, rather than concentrating them on its fully-owned properties like FreeShop.com, Desteo.com, Catalogsite.com, Freeshopmagazines.com and Freeshopcoupons.com.

So far, distribution partners include iVillage, About.com, and NBC Internet, each of which will receive a portion of the revenue generated by placements on their sites. The free offers will be placed according to context and on results pages of keyword searches. In addition, the company, through a partnership with affiliate marketer Be Free, has a network of more than 75,000 specialized Web sites and email channels on which its offers appear.

“Now we don’t have to make the consumers come to FreeShop.com to meet the needs of our clients,” said Tim Choate, chairman and chief executive officer of Aptimus.

Aptimus specializes in customer acquisition for direct marketers, providing clients with placements of offers for free items — free trial offers for magazines, free catalogs, free email newsletters — and receiving payment when a consumer responds.

For publishers, participating in the Aptimus network gives them a new revenue stream — from direct marketing — at a time when CPM-based advertising is in the doldrums. And because this business is handled by Aptimus, publishers don’t have to make a big investment in infrastructure or salespeople.

“Aptimus will help NBCi execute against our core business strategy of connecting our high quality user base to commerce opportunities from leading brands, helping to add an incremental revenue stream to our business,” said Will Lansing, chief executive officer of NBC Internet.

The new strategy puts Aptimus into competition with other players that have a distributed strategy — Commission Junction.com and Get Relevant.com.

Aptimus today officially announces third quarter results, but earlier this month made a pre-announcement saying it would bring in $5.6 million in revenues, falling short of analysts’ expectations. The company’s says its operating earnings per share will come in at -$0.23. Analysts had expected FreeShop.com to lose $0.24 a share.