Search123 Divestiture

On September 20, ValueClick announced the pending divestiture of Search123, a self-service paid search business operating in Europe. The business was previously included in the Company's Owned & Operated Websites segment. The transaction closed on September 30. 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 is presenting the Search123 business as a discontinued operation for all periods, including the third quarter of 2012, and is recasting the Company's historical consolidated financial statements and segment operating results to reflect this change. Updated trended schedules are available under the "Featured Presentations" section of ValueClick's investor relations page at http://ir.valueclick.com.

Business Outlook

Today, ValueClick is providing guidance for the fourth quarter of 2012:
    Q4 Guidance
Revenue  

$196-$200 million
Adjusted-EBITDA  

$68-$70 million
Mid-Point Adjusted-EBITDA Margin  

34.8%
Non-GAAP diluted net income per common share   $0.51-0.52
Impact of stock-based compensation and amortization of intangibles, net of tax   $(0.10)
GAAP diluted net income per common share   $0.41-$0.42
 

The consolidated revenue guidance ranges are based on the following segment-level assumptions for revenue growth rates expressed as a percentage change from fourth quarter 2011 reported revenue levels:
    Affiliate Marketing:   Up high single-digits
Media: Up low twenties
Owned & Operated: Down mid single-digits
 

Fourth quarter 2012 guidance assumes: stock-based compensation of $5.0 million; amortization of intangible assets of $6.5 million ($2.5 million of which will be classified in Cost of revenue); net interest and other income of zero; a 40 percent effective tax rate; and 77 million diluted shares outstanding.

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