Acxiom Corp., which has purchased electronic marketing services firm Digital Impact for $140 million, will group the company with SmartDM, the information management service agency it acquired in January. Acxiom company leader Charles Morgan said that a few other complementary Acxiom operations would likely be combined into the new business unit, which will be headed by Digital Impact CEO William Park.
Part of the impetus for the acquisition was that the Little Rock, AR-based data firm had been handing some of its electronic marketing work to third party vendors, Morgan said during a conference call. The company wanted both to bring these operations in-house in order to shrink processing times and to be able to scale its capacity to meet increased demand.
Furthermore, two of its largest financial services clients had indicated they were going to be spending a lot more money on electronic marketing and less on postage, Morgan added.
Acxiom’s marketing leader Richard Howe noted that while traditional direct marketing spending is seen as growing by 6% every year through 2008, online marketing should jump from $3.4 billion to $6.1 billion — a 16% growth rate — during the same period.
The acquisition by Acxiom means that another player in the compiled information industry, infoUSA, was not able to purchase Digital Impact. InfoUSA had made an unsolicited bid of $2 per share for the company at a time when its stock was trading at under $1.50 per share. The Acxiom offer amounted to $3.50 per share.
In an interview, infoUSA CEO Vinod Gupta commended the Digital Impact board for “finally acting on shareholders’ behalf,” and noted that at a per-share price of $3.50, the acquisition would not have been a good deal for infoUSA.
Acxiom’s acquisition means that both it and infoUSA own opponents in trademark infringement litigation. On March 8, Digital Impact sued YesMail Inc., an e-mail marketing service company owned by infoUSA, over technology that allows users to remotely determine file formats processed by an e-mail host.
Both Gupta and Morgan said that they were unaware of the lawsuit their subsidiaries are engaged in. While the papers have been filed in the U.S. District Court for the Northern District of California, they have not been served yet, according to attorney Thomas E. Moore III of Tomlinson Zisko, which along with Wilson Sonsini Goodrich & Rosati is representing Digital Impact.
Moore added that he expects the papers to be served by midweek.
There is already anecdotal evidence that Acxiom’s acquisition will pay off. “I think you have been working to acquire one of Acxiom’s largest customers as a new customer of yours,” Morgan said to Park during a conference call. “We’re going to help you.”
“We appreciate that help, but I refuse to give you a commission on that deal.” Park replied.
Network
