AdOne, PowerAdz to Merge

Rival networks AdOne and PowerAdz are set to merge in a bid to control the niche industry of online classifieds sales.

The two Alley-based ASPs each provide services to newspapers, which helps them publish online, administer Web classified ads sections and enables advertisers to buy classifieds on the Web sites of major dailies.

Following next month’s closure of the merger, the terms of which were not disclosed, the new, as-yet-unnamed company should be doing business with newspapers representing just under 50 percent of the country’s daily circulation.

“Our mission is to provide local media companies with the tools to operate successful and profitable online businesses,” said PowerAdz president and chief executive Mark Chudzicki. “We remain absolutely committed to developing and delivering technology solutions that reduce costs and complexity for our affiliates. Merging our companies allows us to do this in the most effective way possible.”

Added AdOne CEO Brendan Burns, “The combination of AdOne and PowerAdz allows us to establish a company that delivers best-in-breed business solutions to meet the challenges of online publishing and advertising.”

While the new company — which will be led by Burns and Chudzicki as co-CEOs — faces competition from other niche players like Classified Ventures (whose backers include the New York Times Co. and Gannett) and AdStar.com (which powers eBay’s local classifieds pilot program). Yet AdOne and PowerAdz come to the table with sizable support from several major publishers themselves.

AdOne, for instance, is backed by Advance Publications, Belo Corp., Donrey Media Group, The E.W. Scripps Company, The Hearst Corporation, and a host of others. Meanwhile, PowerAdz brings a network of 1,600 affiliated newspapers, including the New York Post, Orange County Register, Milwaukee Journal Sentinel, and Pittsburgh Post Gazette.

Such efforts are meant to capitalize on what many believe is massive traffic flowing to the Internet versions of local newspapers. According to some, local papers’ sites are massively undercounted by panel-based Web researchers, but represent significant opportunities for regionally targeted advertisers.

Accordingly, the self-service online buying systems that AdOne and PowerAdz have in place allow newspapers to acquire advertisers with little involvement on the part of the papers’ classified ads personnel — saving cost on online transactions.

That’s in keeping with recent efforts by Web publishers to roll out “do-it-yourself” ad products focused on attracting small businesses, who often escape the attention of sites’ ad sales staffs.