24/7 Real Media, Inc. History

1250 Broadway
New York, New York 10001

Telephone: (212) 231-7100
Fax: (212) 760-1774

Public Company
Incorporated: 1998 as 24/7 Media Inc.
Employees: 308
Sales: $52.4 million (2001)
Stock Exchanges: NASDAQ
Ticker Symbol: TFSM
NAIC: 541810 Advertising Agencies; 541840 Media Representatives

Company Perspectives:

24/7 Real Media provides marketing and technology solutions to online marketers and publishers. Our products and services are designed to meet the needs of marketers and publishers in all new media.

Key Dates:

24/7 Media Inc. is formed in New York City by a merger of Petry Interactive, Inc., the former Katz Millennium Marketing, and Interactive Imaginations, Inc.; the company goes public later in the year.
24/7 Media enters e-mail marketing with the acquisition of Sift, Inc. for $22 million in stock.
24/7 Media acquires e-mail marketing firm Exactis.com Inc. for $490 million in stock; another major acquisition involves Sabela Media, Inc., an Australian advertising network, for $70 million.
24/7 Media divests several properties, including Sabela Media and Exactis.com; the company merges with Real Media, Inc. and is renamed 24/7 Real Media, Inc.
24/7 Real Media sells its broadband and professional services division, its Latin American operations, and a majority interest in its 24/7 Mail division.

Company History:

Formed in early 1998 as 24/7 Media Inc., the company, renamed 24/7 Real Media, Inc., specializes in providing services to support Internet-enabled online advertising and marketing. A successful initial public offering (IPO) in August 1998 has enabled it to pursue a fairly aggressive acquisitions strategy. As spending on Internet advertising has grown, 24/7 Media's revenue has increased dramatically. It has expanded internationally and into related areas such as e-mail marketing and online promotions. When Internet ad spending slowed in the second half of 2000, 24/7 Media began to sell off some of its noncore businesses. It has refocused on its North American core businesses, which include ad serving technology, online media representation, integrated marketing solutions, e-mail list management and brokerage, online promotions, and search engine optimization. In October 2001 24/7 Media merged with Real Media, Inc. to form 24/7 Real Media. Although the company has yet to achieve profitability or a positive cash flow, it hopes to break even by the fourth quarter of 2002.

Pursuing Aggressive Growth Strategy in 1998

The formation of 24/7 Media Inc., a new media company that would provide interactive advertising solutions for Internet advertisers and publishers, was announced at the end of 1997 and completed in April 1998. 24/7 Media was created as the result of a merger between Petry Interactive, Inc., the former Katz Millennium Marketing, and Interactive Imaginations, Inc. Petry and Katz were formerly interactive divisions of major media advertising agencies, and Interactive Imaginations was the owner of the Commonwealth Network and an online marketing innovator. David J. Moore, CEO of Petry Interactive, was named CEO of 24/7 Media, while Jay Friesel, president and CEO of Katz Millennium Marketing, became executive vice-president of sales and administration. Interactive Imaginations' CEO Michael Paolucci joined 24/7 Media as a member of the board of directors.

24/7 Media began with an initial investment of $10 million from a variety of institutional investors. From its inception, 24/7 Media represented a large number of web sites that included an aggregation of smaller sites as well as prominent sites such as AT&T Worldnet, Columbia House, Comedy Central, Fox News, Reuters MoneyNet, AOL NetFind, Frommer's Travel Guide, Rolling Stone, Modern Bride, and Better Homes and Gardens Online.

In April 1998 24/7 Media added advanced e-commerce technology and an advanced advertising management system to its capabilities with the acquisition of Intelligent Interactions Corp. for $7.7 million. Intelligent Interactions' flagship product was 24/7 Connect, an advanced advertising management system that enabled advertisers and web sites to target and deliver ads to specific audience segments on the basis of demographic and lifestyle information. Its e-commerce product, dbCommerce, utilized database marketing techniques to deliver personalized promotions to distinct audience segments and individual customers. Following the acquisition, Intelligent Interactions' management team joined 24/7 Media. The company continued to operate independently from its headquarters in Alexandria, Virginia, while expanding its operations in New York City.

Pursuing an aggressive growth strategy, 24/7 Media acquired the CLIQNOW! Sales Group, the Internet advertising representative division of K2 Design, Inc., for $4 million in cash and stock. CLIQNOW! represented more than 75 web sites and served some 75 million ad impressions per month through eight branded networks.

In August 1998 24/7 Media went public, offering 3.25 million shares at $14 per share. In January 1999 the company filed for an additional public offering of four million shares, of which two million were offered by existing stockholders. For 1998, 24/7 Media reported revenue of $19.9 million and a net loss of $24.7 million, compared to revenue of $3.1 million and a net loss of $5.3 million in 1997. By December 1998 the company was delivering an aggregate of approximately one billion ad impressions per month.

International Expansion, Entry into E-Mail Marketing, and Enhanced Domestic Services in the Late 1990s

Before the end of 1998 24/7 Media entered into a strategic partnership with Hong Kong-based China.com Corp. to introduce 24/7 Media to Asia. The 24/7 Media Network-Asia was launched in October 1998 and was operated by China.com.

24/7 Media further expanded its operations internationally in 1999 and 2000 through a series of acquisitions and strategic partnerships. In January 1999 the company launched 24/7 Media Europe through a strategic partnership with London-based InterAd Holdings Ltd., Europe's first international Internet advertising sales firm. Under the terms of the deal, which was valued at $4 million, 24/7 Media obtained a 60 percent interest in InterAd Holdings and its regionally incorporated offices throughout Europe. In exchange, 24/7 Media purchased the interest of a selling stockholder and provided the company's European operations with a significant investment. The 24/7 Media Europe Network initially consisted of 64 high-demand web sites represented by eight sales offices in seven European countries. In August 1999 24/7 Media Europe launched 24/7 Suomi, an ad sales network devoted to Finnish advertisers and web sites.

In mid-1999 24/7 Media acquired ClickThrough Interactive, a Toronto, Canada-based Internet advertising sales network. It was Canada's largest network and represented more than 65 premium Canadian web sites, including the Toronto Stock Exchange, Canada Newswire, and others.

With the launch of 24/7 Latino in October 1999, 24/7 Media became the first online ad sales company to open a network across the entire Latin American continent. 24/7 Latino began with offices in Mexico City, Sao Paulo, Buenos Aires, and Lima, with regional headquarters located in Miami.

24/7 Media's entry into e-mail marketing began with the acquisition in March 1999 of Sift, Inc. for $22 million in stock. Sift was a full-service provider of e-mail direct marketing services, including an e-mail distribution service bureau, list management services, and a service that appended e-mail addresses to existing customer lists. 24/7 Media's e-mail division was named 24/7 Mail.

24/7 Media expanded its e-mail marketing capabilities later in the year with the acquisition of ConsumerNet for $52 million. ConsumerNet owned the Internet's largest cooperative opt-in e-mail database. Opt-in e-mail addresses were those in which consumers agreed to receive promotional materials via e-mail. 24/7 Media claimed that the acquisition of ConsumerNet made it the largest single source for opt-in e-mail addresses, giving it a total of more than 11 million opt-in e-mail addresses under management.

In December 1999 24/7 Media announced that it had signed several new clients for 24/7 Mail and increased the number of permission-based e-mail names under management to 15.5 million. The company also announced that 24/7 Mail would begin its global expansion in Europe in 2000.

Domestically, the 24/7 Network added three new content channels in February 1999 that enabled online media buyers to focus on e-commerce, career, and kid-oriented web sites. At the time the 24/7 Network consisted of more than 125 brand-name web sites organized into content channels. 24/7 Media also operated The ContentZone, a network of more than 2,500 small to medium sites.

During the first half of 1999 24/7 Media entered into a three-year agreement with NBC Interactive Neighborhood to create the first nationwide advertising sales force that would focus exclusively on the convergence of television and the Internet in local markets. Initial launch markets included stations owned and operated by NBC in New York, Los Angeles, Chicago, Washington, D.C., Dallas, and San Diego. The sales force, which operated out of NBC stations and local 24/7 Media offices, began offering integrated multimedia packages to local advertisers in July 1999.

24/7 Media launched a new direct marketing service division, 24/7 Direct, in April 1999. The division enhanced the company's work with direct marketers by offering a wider range of services, from up-front planning to back-end analysis. Around this time the company also launched 24/7 Promotions, an online direct marketing service. It encouraged a pre-qualified audience of consumers selected from information collected on the 24/7 Network to opt-in via registration and enter a sweepstakes related to a sponsor's products or services.

Toward the end of 1999 24/7 Media upgraded its online ad delivery and management system with the introduction of 24/7 Connect. The company claimed that 24/7 Connect incorporated industry features not currently available in any other single ad serving system and that it would result in new levels of targeting, user profiling, and online campaign management for its advertising clients.

For 1999 24/7 Media reported a 331 percent growth in revenue to $90 million, with a net loss of $39.1 million attributable to common stockholders. 24/7 Mail contributed $5.4 million in revenue, and international revenue represented 12 percent of overall revenue.

Continued Expansion Through Acquisitions in 2000

24/7 Media continued to expand through acquisitions for the first nine months of 2000. In January the company acquired IMAKE Software and Services, Inc. and Sabela Media, Inc. The two separate stock-for-stock transactions had a combined value of $150 million. IMAKE was a leading provider of technology products that facilitated the integration of broadband video programming with a variety of Internet-enabled services. IMAKE's system integration services also played a key role in the development of 24/7 Connect. IMAKE's technology would enable 24/7 Media to deliver online advertising campaigns across a variety of platforms, including web sites, e-mail, electronic programming guides, wireless, set top boxes, and other information appliances, via one interface.

Based in Australia, Sabela was a global ad serving, tracking, and analysis company. Its adaptive targeting technology enabled online advertisers to react to changes in a user's profile instantly. Sabela became 24/7 Media's third-party ad serving provider outside of the United States and was rebranded 24/7 Connect for Advertisers and Publishers in March 2000. At the same time 24/7 Media launched 24/7 Connect for Networks to serve advertisers in the United States. The company also formed 24/7 Media Technology Solutions with James Green, former CEO of Sabela Media, as its head.

Other acquisitions in the first half of 2000 included AwardTrack, Inc., a loyalty incentive firm that gave 24/7 Media customers new tools for building brand loyalty through its turnkey customer relationship management (CRM) program. A notable feature of AwardTrack's CRM program was that it allowed consumers to combine points from several different rewards programs and to transfer points in real time between participating rewards programs. AwardTrack was acquired for approximately $75 million in stock. In June 2000 24/7 Media acquired iPromotions, a market leader in incentive marketing programs for online marketers.

24/7 Media completed its $490 million stock-for-stock acquisition of Exactis.com Inc. in June 2000. Exactis offered a complete suite of customized e-mail communications solutions and delivered more than ten million e-mail marketing and communications messages daily.

24/7 Media's final acquisition in 2000 involved Website Results, which was acquired for $95 million in stock. Website Results specialized in driving traffic to client web sites based on queries performed at major Internet search engines.

During much of 2000 24/7 Media was involved in patent litigation against competitor DoubleClick Inc. 24/7 Media's lawsuit alleged infringement on its patent for providing content and advertising information to a targeted set of viewers. Another countersuit against DoubleClick on behalf of Sabela charged DoubleClick with violating federal antitrust laws. The lawsuits were settled in November 2000, with 24/7 Media and DoubleClick agreeing to grant each other certain rights regarding their patents.

Advertising Slowdown Resulting in Consolidations and Divestitures: 2001-2002

By the third quarter of 2000 it was clear that the Internet advertising sector was experiencing a serious downturn. 24/7 Media reported a net loss of $102.8 million for the first nine months of 2000 on revenue of $48.1 million. With revenue expected to be flat in the near future, the company laid off 200 workers. An additional 100 jobs were eliminated in January 2001, reducing 24/7 Media's workforce to around 900. The company's stock was trading at less than $1 a share.

24/7 Media took the unusual step of delaying its earnings announcements for the fourth quarter and year ended December 31, 2000, by one month. On March 21, 2001, it announced that total revenue for 2000 was $185.2 million, a 106 percent increase over 1999. The company reported a fourth quarter net loss, however, of $677.1 million, which included a $500.2 million charge related to the impairment of intangible assets. Management explained that, due to the decline in the valuation of companies operating in the Internet and technology sectors, it was necessary to adjust the carrying value of certain intangible assets, most notably those related to recent acquisitions. The company managed to secure additional financing and was actively considering other strategic and financial alternatives to enhance its liquidity.

In April 2001 24/7 Media announced a restructuring that eliminated 100 employees and resulted in the closure or downsizing of selected offices. The company planned to focus on cost savings and those business units that were closest to profitability. It also began to sell some business units. In May it sold the technology assets of Sabela Media to competitor DoubleClick. Exactis.com was sold to Experian for $13.5 million.

Other cutbacks included the discontinuation of 24/7 Media's funding of its investment in 24/7 Media Europe in favor of focusing on its core businesses in North America.

At the end of October 2001 24/7 Media merged with Real Media, Inc., a global provider of marketing solutions to the digital advertising industry. The new company was named 24/7 Real Media and was headquartered in New York City. David Moore remained as CEO. The stock-for-stock deal was valued at about $1.9 million, with Real Media's majority owner, PubliGroupe of Switzerland, owning about 20 percent of the new company. PubliGroupe announced that it would extend an undisclosed line of credit to 24/7 Real Media, which had a combined staff of 540 employees, until the fourth quarter of 2002, when the company expected to break even.

24/7 Real Media continued with its divestitures in 2002. In January it sold IMAKE, its broadband and professional services division, to a group led by IMAKE President Mark Schaszberger. 24/7 Real Media received $6.5 million in consideration, plus a 19.9 percent ownership interest in the acquiring entity. In March 24/7 Real Media completed the sale of its Latin American operations to a Brazilian group led by local management and investors. In May it sold a majority stake in its 24/7 Mail business to Navisant, Inc., a leader in permission-based e-mail marketing.

Toward the end of the first quarter 24/7 Real Media launched its first multichannel advertising campaign in over a year. The campaign included print ads in trade publications as well as banner ads, branded e-mail, and direct mail. The campaign was designed to forge a new corporate identity following the merger as well as to generate leads for the company's core businesses.

With its stock trading at around $.25 a share, 24/7 Real Media in June 2002 transferred its listing from the NASDAQ National Market to the SmallCap Market. The company maintained that its turnaround was underway, and it was hopeful that its stock would eventually reach the larger NASDAQ board's $1 minimum bid requirement.

Principal Divisions: 24/7 Network; 24/7 Mail; 24/7 Website Results; 24/7 Real Media Promotions.

Principal Competitors: DoubleClick, Inc.; Engage, Inc.; Interep National Radio Sales, Inc.; L90, Inc.; ValueClick, Inc.

Further Reading:

  • Clark, Philip B., "24/7 Media Trims Staff," B to B, January 8, 2001, p. 2.
  • Colkin, Eileen, "24/7 Shifts Gears As Online Advertising Falls," InformationWeek, June 4, 2001, p. 36.
  • "Costly Deal in Ad Drought," Crain's New York Business, November 26, 2001, p. 20.
  • Macaluso, Nora, "Patent Settlements Lift DoubleClick," E-Commerce Times, November 8, 2000, http://www.ecommercetimes.com.
  • Riedman, Patricia, "Ad Networks Face Trouble As Stocks Fall," Advertising Age, December 4, 2000, p. 42.
  • "Round-the-Clock Interest in 24/7?," Business Week, July 19, 1999, p. 147.
  • Sullivan, Carl, "Rivals Merge Online Ad Ops," Editor & Publisher, November 5, 2001, p. 5.

Source: International Directory of Company Histories, Vol. 49. St. James Press, 2003.