Ad Network Undertone Taking Private-Equity Investment

Mar.31, 2008 in Market Outlook

Last Update: 3/31/2008 8:34:07 AM

By Shira Ovide
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–Online-advertising network Undertone Networks is expected
to announce an investment from a private-equity firm, underscoring the frothy
conditions for the firms that connect buyers and sellers of Internet ads.

Both sides said the investment from JMI Equity will help Undertone expand its
operations, offer more products and amp its expansion plans at a key moment for
ad networks, which match buyers of Internet ads with Web sites that have ad space
to sell.

“Everyone knows there’s a role for ad networks,” said Undertone Chief Executive
Michael Cassidy. “We need to make sure we’re moving as fast as the market.”

The market for ad networks is swiftly advancing, as advertisers increasingly use
them to buy online ads across the Web. The shifting tides have hurt some major
Web portals, as Yahoo Inc. (YHOO) and its peers, which are losing their
stranglehold over the market for graphical display ads.

Yahoo and Google Inc. (GOOG) are among Internet giants that have bought their way
further into the ad-network market.

Undertone positions itself on the high end of the market, as it places ads on
what it says are trusted Internet sites.

Terms of the Undertone deal aren’t being disclosed, but JMI General Partner Brad
Woloson said the investment was between $10 million and $100 million. Woloson is
slated to join Undertone’s board.

JMI has a track record of success in online advertising. One of its prior
investments was in DoubleClick, which Google recently acquired for more than $3
billion.

Did you like this? If so, please bookmark it,