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  • Leading provider of e-Marketing tools Sep. 23, 2003 S. Cho, C. Lu, J. Park, J. Weinberg, C. Yang, H. Yang Carnegie Mellon University MSEC 2004
  • OUTLINE • Brief History • Business Strategy • Business Model • Financials • Competitive Structure • Value Chain • SWOT • Information Technology Carnegie Mellon University MSEC 2004
  • Brief History (1) 1995~1997 : Starting Business to revolutionize Internet advertising 1995 • Poppe Tyson formed DoubleClick as its new media division. • Kevin O'Connor and Dwight Merriman started Internet Advertising Network (IAN); e-mail White Pages directory 1996 • Poppe Tyson bought IAN and merged its know-how with DoubleClick's client network and O'Connor became CEO of the new DoubleClick. • Developed DART (Dynamic Advertising Reporting and Targeting) • Partnership with AltaVista 1997 • Launched DoubleClick Direct, a results-based advertising network Carnegie Mellon University MSEC 2004 View slide
  • Brief History (2) 1998~2000 : IPO & Broadening services through acquisitions growth 1998 • IPO and expanded its client network from 60 Web sites to 1,300. 1999 • NetGravity was merged with DoubleClick's Technology Solutions division • Branched out into database marketing by acquisition Abacus Direct (90 million buyer profiles and 1,800 merchants) • Became the target of a Federal Trade Commission privacy investigation into its data-collection methods. 2000 • Began working with regulators to develop online privacy policies. Carnegie Mellon University MSEC 2004 View slide
  • Brief History (3) 2001~ present: : Rethinking its strategy and restructuring 2001 • Acquired @plan, FloNetwork, and L90's ad-serving software • IPO DoubleClick Japan • Launched Diameter and Internet marketing research • Laid off more than 350 employees in 2000 and 2001 2002 • Refocused on providing e-marketing tools and technology • Sold Media business, email List Services and acquired MessageMedia 2003 • Recast as marketing technology company • 1,500 advertisers and publishers, 300 email marketers and 1,800 Abacus Alliance members Carnegie Mellon University MSEC 2004
  • Business Strategy • Vision : Leading provider of e-Marketing tools • Mission : “Making marketing work better” • Help clients acquire new customers cost effectively. • Help clients retain and grow profitable customer relationships. Carnegie Mellon University MSEC 2004
  • Business Model – Infomediary Marketers • Marketing solutions • Marketing Data • Marketing solutions • Marketing solutions • Marketing Data • Marketing Data Clicks Ad Agencies Web Publishers Carnegie Mellon University MSEC 2004
  • Business Model - products and services (1) • Full Suite of Marketing Solutions (Source: DoubleClick.com) Carnegie Mellon University MSEC 2004
  • Business Model - products and services (2) MediaVisor, Increase the efficiency of marketing Marketing Automation DoubleClick planning, tracking, and analysis Ensemble Offer ad management and serving solutions for Site Directory Online Advertising marketers, agencies and web publishers DART (DFA, DFP) DARTmail Premier Help clients manage and grow powerful email Email Marketing Self Service programs and enable high performance. Strategic Services Abacus Catalog Help marketers target the potential consumers, Direct Marketing Alliance lower the costs and increase the performance Abacus BtoB Alliance Help clients measure performance within and ChannelView Marketing Analytics across channels. SiteAdvance Database marketing Provide marketers with the tools to Data Management Apllications Database harness customer data for effective campaigns. marketing Strategy Carnegie Mellon University MSEC 2004
  • Financials – Operating revenues Total operating revenue 700,000 600,000 505,611 500,000 405,647 400,000 300,198 258,294 300,000 200,000 138,724 123,610 Projected: 67,926 $250,000 100,000 - 2 97 98 99 00 01 02 Q 19 19 19 20 20 20 03 20 (in thousands) • Operating revenue sources - Technology: internet marketing solutions - Data: data analysis, research and collection - Media: internet advertisement sales Carnegie Mellon University MSEC 2004
  • Financials – Revenue sources Operating revenue sources 0.8 0.7 68.8% 0.6 0.5 0.4 0.3 31.2% 0.2 0.1 0.0 1997 1998 1999 2000 2001 2002 2003 Q2 Technology Data Media • Technology = 68.8% • Data = 31.2% • Media = 0% (sold by the end of 2002) Carnegie Mellon University MSEC 2004
  • Financials – Operating expenses Total operating expenses 700,000 600,000 511,669 500,000 400,000 329,218 341,198 300,000 209,853 200,000 84,503 74,307 Projected: 100,000 42,013 $150,000 - 2 97 98 99 00 01 02 Q 19 19 19 20 20 20 03 20 (in thousands) • Operating expense sources - Sales and marketing - General and administrative - Product development: in-house building up Carnegie Mellon University MSEC 2004
  • Financials – Expense sources Operating expense sources 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 1997 1998 1999 2000 2001 2002 2003 Q2 Sales and Marketing General and Administration Product development • Sales and Marketing = 54.5% • General Administration = 23.2% • Product development = 22.3% Carnegie Mellon University MSEC 2004
  • Financials – Net income Net income 200,000 100,000 - 19 19 19 20 20 20 20 (100,000) 97 98 99 00 01 02 03 Q 2 (200,000) (300,000) (400,000) (in thousands) • From 2003, the net income was converted to positive • From 2001, the restructuring expenses were increased Carnegie Mellon University MSEC 2004
  • Competitive structure • Several competitors • Solution technology • DoubleClick dominates Entry Barriers • (patent such as DART) the market share • Data expertise • Global network • Financial barriers Suppliers Buyers • Solution S/W providers • Advertisers • Almost no suppliers • Web-publishers • Due to in-house Solution • Direct marketers Threat of Substitute • Offline advertising • Traditional database system Carnegie Mellon University MSEC 2004
  • Value chain Human Resource Management Sales and Marketing 37%, Engineer 19%, Technician 29%, Staff 15% Inbound Operations Outbound Marketing Services Logistics Logistics and Sales • Cookies •Product • Technical • Sales • Customer • Customer development solutions • Marketers Training data •Database • Data • Ad Agencies • Call center management products • Web Publishers Information Technology (DART, MediaVisor, Abacus, Ensemble, ChannelView) Carnegie Mellon University MSEC 2004
  • SWOT Strengths Weaknesses • Reliable & scalable technology • Short term contracts • Large Database • Revenue structure • Full suite of customer • Short experiences in the driven solutions international market • First mover – brand name • Not proven business model • Global presence – 30 countries • Relies on internet infrastructure • Financial strength • Marketing experts Threats Opportunities • Privacy issue • Online Ad spending growing • Opt-out option • Intense competition • Increasing broadband users • Poor perception of the • Growing niche media usage effectiveness of online ads • The amount of time and money • Regulations in spamming spent online is growing • Rapid change of business environment Carnegie Mellon University MSEC 2004
  • Information Technology – IT use Business Information Technology • Internet, Cookies • Business resources • Online banner • Data storage • Database management system • IT solutions • Value added - DART, Ensemble, Abacus etc • Targeted banner advertisement • Global Internet • E-Mail, Banner Ads, Usage stats • Distribution / Service • Movie files, etc. Carnegie Mellon University MSEC 2004
  • Information Technology – Strategic lever Distinctive and Strategic technology • Analyzing and gather click stream data (Source: ConsumerReports.org) Carnegie Mellon University MSEC 2004
  • Information Technology – Risks and Benefits Risks • Privacy issue “ This Monday, we revealed that the Federal Trade Commission (FTC) began a voluntary inquiry into our ad serving and data collection practices,” - Kevin Ryan, President of DoubleClick Inc., Feb. 17, 2000. - “ Web users have lost privacy with the drop of a cookie..” – Will Rodger, USATODAY.com- Benefits • Better advertising: targeting, tracking and reporting • Can offer comprehensive IT solutions from Database management to marketing plans and campaigns. Carnegie Mellon University MSEC 2004
  • Q&A Carnegie Mellon University MSEC 2004
  • Thank you! Carnegie Mellon University MSEC 2004