Yahoo Snatches Up Interclick for $270M to Enhance Its Ad Targeting

11/2/11Follow @jpruth

New York’s interclick (NASDAQ: ICLK), an advertising technology company, agreed to be acquired by Yahoo (NASDAQ: YHOO) for $270 million in cash, according to a press statement on Tuesday.

Five-year-old interclick developed a platform to help advertisers process large volumes of data from multiple sources to better understand and target their audiences with online display and video ad campaigns. According to an interclick spokesperson, the company’s management will remain onboard after the acquisition is complete. Yahoo is offering $9 cash per share for all outstanding shares of interclick. The deal is expected to close by early 2012.

The acquisition by Yahoo is a bit of a coup for interclick, which is rapidly making a name for itself in the online advertising sector. In October, comScore said interclick ranked No. 16 among ad-focused Web properties in the U.S. for the previous month. Yahoo Network Plus was No. 2 behind Google Ad Network in the same ranking.

Interclick has been growing quickly on its own. In an earnings statement released in August, interclick estimated its 2011 revenue would be about $142 million, up from its previous guidance of $140 million. Interclick reported a profit of $4 million on revenue of $101.2 million for 2010, up from a profit of $502,000 on revenue of $55.3 million in 2009.

Though its technology whetted Yahoo’s appetite, interclick has had to defend some of its practices in court. In August, the U.S. District Court for the Southern District of New York dismissed, with prejudice, several claims against interclick that alleged the company’s online advertising practices violated a variety of state and federal laws. Last December, Sonal Bose filed a lawsuit, which included claims of privacy violation, against interclick and sought class action status. Bose alleged interclick monitored her Web browsing and misappropriated personal information via code within online advertisements; however, she dropped the privacy violation claim in March.

Michael Katz, CEO of interclick, said in a statement, “We have said from the beginning, interclick has always taken consumer privacy very seriously and these claims were brought without merit.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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