ValueClick to Sell Japanese Unit

Online marketing firm ValueClick is shedding its interest in ValueClick Japan, selling it to a Japanese Internet company for $24 million in cash.

Westlake Village, Calif.-based ValueClick owned a 59 percent interest in ValueClick Japan, which was established in 1998. Livedoor is a Tokyo-based Internet and technology firm that operates a variety of businesses, including free ISP livedoor, an Internet advertising unit called “cyberclick” and an email marketing operation.

Though it may appear the sale represents a lack of interest by ValueClick in Asian markets, the company says it’s not turning its back on the opportunities there. The proposed sale calls for the company to continue to provide ad serving and media technologies to ValueClick Japan. ValueClick also retains the rights to the technology used to serve ads to i-mode compatible mobile phones on the NTT DoCoMo network.

“We are interested in expanding to other parts of Asia,” said James Zarley, chairman and CEO of ValueClick. “The [ValueClick Japan] relationship didn’t include going into Korea and China. We have been looking for the right kind of partners in China. We’d be interested in expanding there.”

ValueClick said the Japanese unit hadn’t been doing as well as it had expected or hoped, so it wanted to focus its efforts elsewhere. The company says the investment brought in $7.6 million in revenues in 2003, generating a loss of $0.3 million. If the deal goes through, ValueClick says it will net around $8 million in cash, given that it loses $14.9 million in net cash, cash equivalents and marketable securities that were on ValueClick Japan’s balance sheets.

“Revenue in Japan has been relatively flat,” said Zarley, adding that ValueClick Japan hadn’t been expected to do any better in 2004.

That $8 million will likely be put toward further acquisitions in the online marketing space. ValueClick hasn’t been shy about saying it would like to make some more purchases. The company last year bought Search 123, Commission Junction, and Hi-Speed Media.

Now, ValueClick is interested in expanding its interest in search or affiliate marketing. It’s also considering acquisitions in analytics, the agency space, or in an e-commerce site like a comparison-shopping engine, company officials said.

“All of those areas are growth areas that are intriguing,” said Zarley.