Flycast Communications Inc has made its first acquisition to build upon its recent move into the email direct marketing and advertising business with the acquisition of InterStep. It has paid $11.3m, based on Monday’s closing price, for the Cambridge, Massachusetts-based company.
InterStep is a targeted email management and delivery company that will augment Flycast’s recently announced eDispatch email marketing system. Flycast plans to add email advertising to its web-based ad management services. InterStep offers an email management system that enables web sites to add email newsletters to their sites, manage the subscriber base, adding subgroups and so on and include advertising and marketing messages within the emails. Flycast’s eDispatch service will involve Flycast selling the ad space and collecting the revenue on behalf of the email publishers.
Flycast’s Larry Braitman who is VP business development says the InterStep system is aimed mainly at small-to medium-sized web publishers that haven’t yet got email newsletters. However, the acquisition also brings Flycast some of InterStep’s larger customers, including Ziff Davis, the Washington Post, Newsweek, which do not overlap with Flycast’s customer base, according to Braitman. He says that about 300 of Flycast’s current 1,100 or so web publishers in its network already have email newsletters and have expressed an interest in adding advertising to them and several hundred more do not have email newsletters at present but have told Flycast they intend to in the future. InterStep’s founders Bill Jacobson and Craig Mattson will hold senior, as yet undefined positions under Braitman, who leads the eDispatch program at Flycast. Flycast has issued 480,337 shares to pay for the acquisition, which has already closed. Flycast closed yesterday down $0.50, or 2% at $23.125.
