ValueClick, Inc. (NASDAQ: VCLK) today announced the divestiture of Search123, its self-service paid search business operating in Europe.
“Search123 has been a small business for us and does not fit with our long-term strategy. Its divestiture allows us to focus on our significant growth initiatives as we build out an integrated solution to help digital marketers drive multi-channel brand engagement and customer acquisition through one strategic partner,” said James R. Zarley, chief executive officer of ValueClick. “As our updated third quarter outlook illustrates, we expect another solid quarter of financial performance, with all segments generating growth in-line with our prior expectations.”
Operating in Europe, Search123 is a self-service offering that generates search traffic through relationships with third-party content websites. Search123’s revenue is generated on a cost-per-click basis through a relationship with a major search engine provider. The business was previously included in the Company’s Owned & Operated Websites segment.
The Company is selling Search123 to Carl White, the former executive in charge of the Company’s European operations. The terms of the transaction, which are not material to the Company’s financial position, consist of future contingent payments based upon the performance of the business over the next four years. In accordance with applicable accounting standards, ValueClick anticipates presenting the Search123 business as a discontinued operation and restating the Company’s historical financial statements and segment operating results to reflect this change. The transaction is expected to close by the end of September.
Search123 generated revenue of $31.4 million in fiscal year 2011 with the first, second, third, and fourth quarters contributing revenue of $7.7 million, $8.5 million, $8.1 million, and $7.1 million, respectively. In the first two quarters of 2012, Search123 generated revenue of $6.4 million and $7.0 million, respectively, representing approximately four percent of the Company’s total consolidated revenue in each period.