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2 firms joining to win more Net ads
SUN STAFF Mark Ribbing
Published on February 22, 2000
© 2000- The Baltimore Sun
As anyone who has used the Internet lately can attest, advertising
seems to be everywhere online. At many Web sites, the first
item to show up on the monitor is a banner advertisement,
the little rectangle at the top of the screen selling anything
from financial advice to Caribbean cruises. Ads often show
up on the sides and at the bottom of the screen, and sometimes
even pop up unbidden.
Today, two Baltimore companies are joining forces to grab
a larger share of the Internet-advertising business. e.magination
network llc , located in Canton, was already involved in several
different aspects of online marketing, including consulting
and the development of Web-site features such as archives
and the "shopping carts" where users can keep track
of the items bought on a given visit.
However, e.magination did relatively little banner-ad business.
That's why it's merging with downtown-based GoldNet Marketing,
a company that focuses on such work. The merger is effective
immediately; the combined company will operate under the e.magination
name.
GoldNet's two top officials, President John Zocco, 26, and
Chief Executive Officer Jason Goldsmith, 24, will together
get up to 10 percent ownership of e.magination, depending
on their division's financial performance over the next year
and a half.
When asked if he's nervous about racking up enough sales
to gain the equity share, Zocco said, "We think that
this is going to be challenging in a way, but we're very excited
and very confident it's going to happen."
GoldNet, which was founded in 1997 and has 10 employees,
had about $3 million in sales last year, including accounts
with some high-profile Web sites such as Priceline.com. e.magination,
which counts the Department of Justice and Sylvan Learning
Systems Inc. among its clients, has 70 workers and had 1999
sales of roughly $8 million.
e.magination Chairman Bruce R. Spector, 47, a veteran of
the cable-television and radio industries, said price margins
in GoldNet's industry are far lower than those in the Web-site-development
industry where e.magination dwells.
Spector said this is why GoldNet could get only 10 percent
of the combined company when it accounts for about one-third
of projected sales.
Spector expects the newly combined companies to each double
their sales from last year.
To accommodate the anticipated growth, e.magination is looking
for 30,000 to 50,0000 square feet of office space in Baltimore.
Spector said more mergers or acquisitions are "absolutely"
in the works for e.magination, but he was less committal about
the likelihood of an initial public offering.
"There's nothing in the works," said Spector. "A
lot of companies do an IPO because they need the money, but
we're already profitable."
Gary H. Arlen, an interactive-media analyst based in Bethesda,
said big national advertising firms are gobbling up ever-larger
shares of the Internet advertising pie.
However, he added that there is still plenty of room for
smaller companies like e.magination.
"As the Net keeps finding new life -- there could still
be room for regional players," said Arlen.
"The market is going to continue to get larger, no question
about it."
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