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By Pratish Narayanan
BANGALORE Feb 13 Online advertising company
ValueClick Inc VCLK.O posted a quarterly profit that beat
analysts' average estimate, and said it settled a regulatory
probe into its marketing practices, sending its shares up more
than 7 percent in after-hours trade.
The company said it settled the U.S. Federal Trade
Commission investigation for $2.9 million, without admitting
any liability or conceding that it violated the law. The
settlement is subject to court approval.
In May, 2007, ValueClick said the FTC had started an
investigation into the marketing practices related to its lead
generation business. Lead generation is a process by which
companies collect personal information by luring consumers with
free gifts and then sell it to online advertisers.
Shares of ValueClick have sunk 28 percent since late May as
the probe cast a shadow over the company's books, hurting
results as some online advertisers stayed away.
The drop in ValueClick's shares due to the probe has been
partially offset by takeover talk that spawned after its bigger
rivals aQuantive and DoubleClick were acquired by Microsoft
Corp (MSFT.O) and Google Inc (GOOG.O), respectively.
News of Microsoft's proposed takeover of Yahoo Inc (YHOO.O)
has further stoked speculation that ValueClick could be snapped
up by bigger companies operating in the Internet advertising
market as they scramble to gain a firmer foothold in the
ValueClick's stock trades at about 26 times forward
earnings, trailing the Internet Software & Services sector
which is at a multiple of about 50.
OUTLOOK STILL BLEAK
ValueClick on Wednesday forecast weak first-quarter and
2008 results as it remains wary about broader macroeconomic
conditions and sees a muted outlook for the troubled lead
ValueClick forecast first-quarter earnings of 15 cents to
16 cents a share, on revenue of $166 million to $170 million,
and 2008 earnings of 78 cents to 81 cents a share on revenue of
$730 million to $745 million.
Analysts were expecting first-quarter earnings of 18 cents
a share on revenue of $174.9 million, and 2008 earnings of 83
cents a share on revenue of $739.9 million.
ValueClick earned $18.1 million, or 18 cents a share, for
the latest fourth quarter. Revenue rose 14 percent to $183.1
million. The earnings include a charge of 3 cents a share
related to the FTC probe.
Analysts on average had expected earnings of 18 cents a
share, before items, on revenue of $175.9 million, according to
The company said on Wednesday the lead generation segment
has been moved to its WebClients division.
Shares of the company rose to $23.27 in trading after the
bell, after closing up more than 4 percent at $21.68 Wednesday
on the Nasdaq.
(Editing by Saumyadeb Chakrabarty)