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Internet ad agencies merge
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January 20, 2000: 8:18 a.m. ET
$2.5B consolidation of 3 CMGI firms means new competitor to DoubleClick
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NEW YORK (CNNfn) - Engage Technologies Inc. disclosed Thursday it is buying two other Internet advertising companies from its corporate parent, CMGI Inc., for stock valued at $2.5 billion.
The companies, Adsmart and Flycast Communications, will be fully integrated into Engage, which is based in Andover, Mass.
The move is seen as creating a stronger competitor to Internet advertising leader DoubleClick Inc. (DCLK).
Terms call for Engage (ENGA) to issue about 32 million shares of stock for the two companies which, like Engage, are majority owned by CMGI (CMGI). CMGI, also of Andover, is a holding company for 60 Internet companies.
Adsmart is an online advertising network for business-to-business and business-to-consumers markets. Flycast, based in San Francisco, provides direct response online advertising.
Engage's services include a profile-driven online marketing network, a database of more than 42 million consumer profiles and an online advertising management system
Paul Schaut will remain president and CEO of Engage, but George Garrick, chairman and CEO of Flycast and John Federman, president and CEO of Adsmart, will join Schaut in a new "office of the president" to oversee strategic operations at Engage.
"Online marketing is no longer about running a golf club banner ad on the golf section of a Web site and hoping your prospects click on it," Schaut said. "It's being accountable for identifying those prospects and turning them into repeat and loyal customers whenever they are on the Web."
Engage stock closed Wednesday at 77, up 4. 
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CMGI
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