The Check is in the Email, DoubleClick Promises

In advertising, the Web is on the ebb. Will email fail, too?

That's a question worth posing to Internet advertising firm DoubleClick (DCLK Quote), which last week staked its future to email marketing by forecasting fourfold revenue growth in that business through next year.

There's no doubt that DoubleClick is wise to expand beyond Internet ad sales, which are expected to fall 20% in the third quarter from already reduced second-quarter levels. The email marketing business will likely expand, and DoubleClick could grow simply by consolidating the highly fragmented sector, as it did in ad sales.

Still, considering how sharply Net ad sales have fallen compared with how much they were expected to rise, it may be a stretch to see email as DoubleClick's salvation. One question is how profitable the email business will be: Though an email firm that DoubleClick is acquiring had good profit margins in the first quarter of 2001, the company wasn't expecting to be cash-flow positive on a stand-alone basis until the end of the year. Until DoubleClick can show its move into email is paying off, investors will be skeptical of its plan.

Running the Numbers

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