In a bid to focus more on its core business segments,
) recently announced the divestiture of its Owned and Operated
Websites (O&O) segment.
The company recently entered into a definitive with
InterActiveCorp (IACI) to sell O&O in an all-cash
transaction, which is expected to close by Jan 2014.
The Owned & Operated segment includes popular websites
like PriceRunner and Investopedia. Following the sale, the owned
& operated websites will be integrated into InterActiveCorp's
Search & Applications segment, which already includes popular
websites such as Ask.com, About.com and Dictionary.com.
ValueClick's decision to divest the O&O segment reflects
its strategy of focusing entirely on its core Media having
revenue of $95.3 million as well as its Affiliate Marketing
segments having a revenue of $38.9 million.
Strength in the Internet advertising industry, increasing
e-commerce spending, focus on core business and improving display
ad growth trends combined with the divestment of non-core
businesses will add to the ValueClick's growth prospects going
forward. The company's focus on high-margin businesses is
expected to drive future growth.
Moreover, advertising through mobile is expected to fuel
e-commerce and online advertising growth. We also remain upbeat
on ValueClick's growing Affiliate Marketing segment.
However, a sluggish macro-economic environment and intense
) are the near-term headwinds.
Moreover, unfavourable foreign exchange and a sluggish
European market remain concerns. ValueClick reported mediocre
third quarter results, with revenues and earnings below the Zacks
Consensus Estimate. We believe that ValueClick's strong product
portfolio, aided by accretive acquisitions, will continue to
drive market share, going forward.
Currently, ValueClick holds a Zacks Rank #3 (Hold).
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