IncrediMail says Google ends AdSense deal; shares drop

Fri Jan 11, 2008 10:09am EST

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(Recasts; adds details, background, share movement)

Jan 11 (Reuters) - IncrediMail Ltd MAIL.O said it received a notice from Google Inc (GOOG.O) stating that the Web search company decided to stop an advertising service partnership between the firms, sending its shares down more than 45 percent to a new year-low.

The advertisement serving program, called AdSense, is for Web site publishers to display relevant ads on their sites and earn money. The advertisements are administered by Google and generate revenue on either a per-click or per-thousand-impressions basis.

Google barred advertisements to search result pages displayed through IncrediMail's account, and its AdSense account has been disabled, the company said in a statement.

IncrediMail, which develops software to customize e-mails, said it was clarifying the matter with the Web search giant, and exploring alternative relationships with Google and other vendors.

Search revenues powered by Google's AdSense program made a significant contribution to its results in 2006 and 2007, the company added.

According to IncrediMail's Web site, it generates revenue by selling software products, offering subscriptions to its content database, and by selling paid advertising, sponsored links and keyword search capabilities on its Web site and e-mail client.

Shares of the company fell to a new year-low of $2.50, before pulling back some of the losses to trade down almost 41 percent at $2.70 in morning trade on the Nasdaq.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Pratish Narayanan)

((supantha.mukherjee@reuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters messaging: supantha.mukherjee.reuters.com@reuters.net;)) Keywords: INCREDIMAIL/PARTNERSHIP

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