It has long been assumed by many investors that acquiring Valueclick (VCLK) would be the first step in “plan B” for Microsoft (MSFT) if its bid to take over Yahoo (YHOO) was unsuccessful. When MSFT’s Steve Ballmer recently ruled out a slew of acquisitions of smaller internet players after pulling its bid for Yahoo, ValueClick’s stock seemed to lose some of its “takeover bait” premium over the next couple of trading sessions. Since that time, the sell off in ValueClick shares has intensified and the stock has set new 52 week lows three times over the last week as rumors swirl that it is now hunting for some strategic acquisitions of its own. As might be expected, investors appear to be pricing in 1) concerns over dilution that might accompany any acquisition 2) typical “sell the buyer, buy the seller” arbitrage or 3) that an acquisition is signaling the switch of management efforts to acquiring instead of being acquired.

Much of the chatter regarding ValueClick acquisitions has focused on the possibility of their acquiring a company that would gain them entrance to the “Pay Per Click” [PPC] advertising space, the very high margin business that the Google empire was built upon where advertisers bid for placement in search results that are offered when consumers seek information on specific keyword search terms. This business was invented by Goto.com, which became Overture.com and was acquired by Yahoo and is now Yahoo Search Marketing. This space has been dominated by Yahoo and Google (GOOG), with Microsoft making a late run to gain a foothold in this space and round out “the big three” in the PPC space. While there has always been a “second tier” of companies trying to gain traction in the pay per click space, none have been able to come close to challenging “the big three” for various reasons.

While we are not in a position to know if there is any substance to the rumors, it does seem that the recent upheaval at Yahoo might make a historic opportunity for the right company to make waves in the pay per click space. If a Yahoo/MSFT deal were to reemerge or if Yahoo moves forward with its plans to outsource much of its premium PPC business to Google, the combination of the #2 and #3 players or the #1 and #2 players in this space would leave the door open for another company to slip into the #3 position. While we don’t think there is any magic associated with being the #3 player in PPC search, we do think that there are quite a few deep pocketed advertisers out there who view both Microsoft and Google as their most feared competitors and would like to see their advertising dollars flow to someone else, particularly newspaper publishers, magazine publishers, TV, radio and other legacy media companies.

Another factor that could make for a historic opportunity to enter the PPC search fray is the current market valuations of the second tier players. Just over a year ago, all companies in the online advertising space (but particularly the owners of ad networks) were being bid up to new trading highs after the frenzied buying of many of the other players ((ie.Aquantive, Doubliclick, 24/7 Media, Linkshare, Digitas) in this space for large premiums to their trading prices. As the deal volume dried up, much of the money flowed out of these names and many are now trading at historic lows.

The two names we have seen tossed around most often as a ValueClick acquisition targets fit neatly into this category - Miva (MIVA) and Think Partnership (THK).

Miva Media Solutions, previously known as Findwhat.com, is the largest of the second tier networks. With over $100 million in annual click revenue flowing through the company’s North American and European networks, Miva stands out as the quickest option for an acquiror looking to gain heft quickly. Miva also owns a number of valuable content sites including the rapidly growing Spill.com, Screensavers.com and WeatherStudio.com in addition to a growing toolbar segment that currently boasts of over 6 million active users.

In addition to offering the possibility of instantly becoming the next largest player in PPC behind MSFT, adding highly regarded content sites and leveraging the possibilities inherent in having an installed base of over 6 million toolbars, ValueClick and others have to look at the current market valuation of MIVA as extremely attractive. With a current market cap of $32.5 million (closing price July 1), no debt and over $22 million in the bank, the same marketplace that one year ago placed a valuation on these operations of just over $225 million is currently placing a value on this same business of less than $10 million. While the $250 million+ valuation achieved during the height of the ad network buying frenzy of a year ago might be on the high side, its hard to imagine that there are not buyers out there willing to pay three or four times the current trading price to take down such a large piece of pay per click market share. ValueClick in particular does seem like a company with the complementary assets, existing clientele and market cache’ necessary to take a business like Miva’s that is struggling to be profitable and significantly expand the margins by reaching the critical mass of advertisers necessary to ramp profitability quickly. With an existing CPA (Cost Per Action) network and display advertising business that reaches 74% of US internet users, its quite likely that ValueClick’s reach and brand name would bring many more advertisers into the fold quickly and also that existing advertisers would be more likely to bid higher and spend more through a ValueClick ad network than they would through Miva owned network.

The company whose name seems to be most frequently mentioned as a takeover candidate for ValueClick is called Think Partnership, (THK). Think Partnership (hereinafter THK) is in many respects similar to ValueClick, albeit a smaller version as it is most widely known for the affiliate marketing platform (Kowabunga) within its “network” segment and the lead generation operations within its “Direct” segment.

THK’s Kowabunga is a highly regarded player in the affiliate marketing space that has long been a thorn in the side of ValueClick, whose “Commission Junction” is the largest player in the affiliate marketing space. While Kowabunga is much smaller than Commission Junction, many high profile corporate names have either chosen Kowabunga over ValueClick’s Commission Junction when they started their affiliate program (like Microsoft and Yahoo Search Marketing’s affiliate programs ) or migrated to Kowabunga after testing the Commission Junction platform (like Intuit). Taking ownership of Kowabunga would make ValueClick’s Commission Junction not only the largest affiliate program provider, but also the “go to” provider for the largest names in technology, not to mention that the removal of a competitor like Kowabunga from the playing field might allow them to raise their percentage take on affiliate transactions.

While the lead generation operations within THK’s “Direct” segment are much smaller than ValueClick’s lead generation ops from a revenue standpoint, THK has actually had more success at maintaining strong margins while steering clear of Federal Trade Commission sanctions. Additionally, the specific niche’s served by THK’s direct segment (home based business owners and life stage niche marketing) would be complementary to ValueClick’s lead generation offerings.

Despite the obvious synergies of the THK businesses above with ValueClick, it is a third aspect that makes it most attractive to ValueClick. THK’s ValidClick AdExchange offers ValueClick an entry into the Pay Per Click space with what is arguably the most differentiated offering in the PPC space and also what is likely the fastest growing ad exchange. The ValidClick AdExchange platform combines a unique patent pending technology for eliminating click fraud combined with an exclusive technology alliance with Fair Isaac Corporation (FIC) that uses analytics based on artificial intelligence and patented profiling technologies that adapt to each click and conversion, scoring publishers on their ability to drive conversions for advertisers. This new exclusive partnership with the company whose FICO score has become the standard in the lending industry makes the ValidClick Ad Exchange that much more attractive to a company wanting to differentiate themselves from the pack in the PPC space. It has also caused many of the second tier networks to run their own ads through ValidClick’s Ad Exchange to take advantage of its Click Fraud protection.

Recent comments by THK management and our own channel checks in several verticals suggest that the ValidClick exchange is experiencing exponential growth in clicks, searches and revenues generated. In the verticals we tested, we saw more than 100% growth in Q2 over the record clicks and revenue achieved by the network during Q1 2008. This Google-like growth stands in stark contrast to the declines in revenue experienced by most of the other Pay Per Click search networks (including Miva) over the last few quarters as Click Fraud concerns seem to have scared more and more advertisers away from second tier PPC networks. These concerns appear to be making the ValidClick’s click fraud prevention technology and alliance with Fair Isaac that much more appealing.

Despite the success of the ValidClick network, THK’s stock has recently traded down to a historical low, with a market cap settling in the $27 million range. With its existing business pieced together by acquisitions totaling nearly $90 million over the last three years, several business segments that appear to be flourishing and a company campaign to divest non core assets that could raise cash greater than its existing market cap, we believe that THK might look like a tremendous bargain to ValueClick and more importantly, a quick entry into the PPC space with a unique offering whose technology solves the biggest problem (Click Fraud) plaguing the second tier PPC networks.

We believe that ValueClick is uniquely positioned to make waves in the Pay Per Click space if it should make an attempt to enter the fray. We also believe that the timing is perfect for such an entry. The current Yahoo conundrum that will likely result in only two of the big three Per Per Click networks surviving combined with the capitulation among investors in the small cap online advertising names makes the “perfect storm” and possibly a historic opportunity for a well financed player with a good name to stake a claim to be the new “first tier” player in this highly profitable space. ValueClick’s sterling balance sheet (over $160 million with no debt) and scale would likely be attractive to MIVA and/or THK’s management team if they are in fact entertaining offers. We believe that they are and note that both have recently announced steps to divest of assets that would not be appealing to a ValueClick or other similarly situated suitor.

We also note that timing is of the essence as there may be some increase in the valuations accorded many of the online advertising assets when Interactive’s (IACI) spin off is complete next month and they begin shopping with their $1.5 billion cash war chest and a stock currency whose valuation will be based on the prospects of Ask.com rather than many of the slower growth businesses that plagued IACI’s valuation for so long. It will likely take just one deal by IACI, CBS’s (CBS) recently acquired CNET or one of the other media players who would benefit from owning an ad network to make the valuations move back to historical norms - much higher than where the currently reside.

Most search engine markets are dominated by Google and there seem to be no real local competitors. In Russia however, a fierce battle for the search query’s of the consumers is going on. But when we talk about Russia then, there is no place for Google. Russia’s largest search engine Yandex, is the first engine that revealed a billion pages outside the .ru domain.

The leading Russian search engine Yandex has expanded its web index outside of Russia by indexing the first billion pages outside the RU domain, says Yandex’s webmaster blog. For example, when one makes a search for an English keyword on Yandex, the search engine will return one result from the COM domain (or other domain) and the other nine results from the RU domain. The ranking of search results is according to Yandex’s general search ranking rules with no particular preference given to non-Russian results.

Yandex has a web index of more than 4 billion pages, including 3 billion pages in Russia. ComScore recently ranked Yandex as the ninth search engine globally.

According to Yandex statistics, 15% of its searches are in a language other than Russian. That would imply that 15% of Yandex revenues from search ads could come from non-Russian searches. Google is number 2 in Russia with 31% market share of referrals behind Yandex with 44% market share, according to LiveInternet.ru.

By expanding its web index outside the RU domain, Yandex will likely seek to retain those of its users who usually switch to Google for searching information outside the RU domain.

How Google will overcome Yandex? Is Yandex a serious threat for Google? The answer is YES! Google has started a $ 250K per month advertising outdoor campaign. he company is launching “”Moscow 2.0,” which includes over 5,000 outdoor advertisements across Moscow. Yandex, with nearly 50% market share, is preparing a Nasdaq IPO. Google has around 31% market share.

 

Kosmix, until now a vertical search engine for information about health, automobiles and travel, transformed itself into a universal search engine for all subjects earlier today during a general redesign.

The move has been anticipated since at least last September, and was described by co-founder Anand Rajaraman in a Beet.tv interview posted less than a week ago.

Now when users conduct keyword searches on Kosmix (much as they would on a traditional search engine like Google or Ask), they are presented with mashups of results from a variety of sources. Unlike Mahalo, Kosmix itself doesn’t publish any of the content it displays. Rather, it pulls it all from services like Flickr, Google, Wikipedia, TheFind, Yahoo Answers, Amazon, Truveo, and YouTube.

Results from each of these sources are shown in their own modules, which are packed rather tightly in a three column layout. We hear that there are hundreds of possible modules, although only a small subset of these show up for each query.

Video is changing the way we use the Internet for entertainment, education, blogging, product promotion and so many other forms of content. Services like YouTube , Metacafe, Google Video,AOL Video and a host of others have created an enormous online viewing audience by making it easy for anyone to upload, search and share videos.

Online video viewings increased by more than 66 percent in just one year, coming to an average of more than 10 billion views per month in 2008, according to comScore estimates. Major entertainment companies, marketing  experts and advertisers are all scratching their heads trying to figure out the best way to turn a profit  on such a huge viewing audience, and many industry leaders are investing heavily in producing content exclusively for the Web. However, the real beauty of the current status is that anyone can create and post a video on the Internet and have a potential viewing audience of millions.

So why is that so important? Like written content, video content has become a powerful form of viral marketing material as well as link bait for search engine optimization.

Videos should first be published on the Web site they were created for. Each video posted on the Web site should have an individual URL (uniform resource locator) that is fully optimized according the key phrase targeted by the video. For example, the page should include targeted keywords in the title tag with a corresponding h1 tag, along with image alt attributes and any other keyword associated on-page optimization. It is also becoming popular to include a transcript of the video on the same page, thus adding a great deal of written content to that page.

Once the page is created, the addition of a video site map will help search engine crawlers to better index and rank the content. Posting the video on the author’s Web site first will also prevent any contest over the origin of the content.

Videos should also be posted on a number of video-hosting and video-sharing Web sites like those mentioned earlier. YouTube, Google Video, Metacafe and AOL Video are the most important sites for submission as they have the most common results in blended search. However, videos from many other submission sites are finding their way into high page ranks as well. Videos should be submitted to each of these by hand with keyword-rich titles and tags, as well as unique and interesting descriptions. By sharing videos on sites like these with friends and colleagues, more views will begin to accumulate, bringing more validity to the content. The higher the number of views a video receives on these sites, the more likely it is to gain a high page rank.

Bookmarking and social networks are now major players in search engine optimization, with major search engines indexing this user-based content. The specific URL of the video should be bookmarked on social media sites like StumbleUpon, Del.icio.us, Digg and others, and will appear as an actual image icon with a new specific URL on the corresponding site.

Though YouTube is the most likely platform for obtaining a large number of views, creating buzz through social media Web sites will bring more direct traffic and provide deep links to the optimized Web site. Achieving traffic through these methods is optimal because it drives traffic directly to the Web site. For this reason, it is also a reasonable practice to install basic bookmarking buttons on the specific video page so that visitors can easily add it to their favorites and bookmarks.

Utilizing video content in Internet marketing and optimization campaigns is a very young strategy that will continue to evolve along with the continued development of search engine technology. These strategies basically follow a previously established and proven link-building model, already widely used to optimize written content.

By following these basic protocols and constantly seeking new avenues for attracting viewers, video can be an extremely successful form of online marketing. The time is now to begin creating videos for the Web. Because the concepts are so new, the opportunity is ripe for businesses to control the video space of their specific industry. Source: TechNews  

What is the key to a successful business? Some say it’s profit. Others think it’s longevity. No matter what your answer is, neith er is possible without this most basic of ingredients — customers.

Customers are the backbone of any business. They are the reason businesses succeed and the reason they start in the first place. It’s easy to see why we need them. What’s not so easy is getting them. In order to gain new customers, small business owners have to consider fresher ways of reaching potential customers. Online networking and blogging are innovative ways to garner new business. Small business owners also shouldn’t abandon the time-tested classics, like direct mail or public relations. The following seven tools are a blend of the old and the new, and if applied to your startup or small business marketing efforts, should help in building your customer base.

1. Network With Other Small Business Owners Online Making connections with other small business owners is a great way to build your customer base. The most efficient way to ma ke those connections is through online social networking sites like PartnerUp. By utilizing our “Ask a Question” feature on the bottom of the My PartnerUp page or participating in the PartnerUp forums, you can initiate relationships with business owners who may someday be in need of services that you provide. If you’ve built a strong relationship and have introduced your products and services, these new connections are likely to seek you out when they need you.

2. Blog About Your Business Everybody’s doing it. Or at least they should be. Blogging is one of the easiest and most cost-effective ways for small businesses to get their name out there. Blogging software is also relatively easy to use. Small business owners don’t have the time to learn HTML or the money to hire a Web developer, so blogging is a more efficient way for them to create a Web presence. By sharing your knowledge of a given subject matter and providing helpful tip s and useful content on your blog, you’re going to quickly attract the interest of potential customers.

3. Sell Through Your Web site A great way to gain new customers is to use your Web site to sell your products or services. It sounds like common sense, but many businesses don’t. And those that do don’t always do it effectively. Make sure that your Web site is easy for customers to search for, that what your business does is clear immediately upon entering your web site, and that it is easy for customers to purchase your products and services. It must be user-friendly and have a clean and easy-to-read layout. If it does, you can watch your sales grow. If it doesn’t, you may as well provide customers with a link to your competitor’s Web sites as it won’t be hard for them to find your competitors on Google.

4. Advertise Online Online advertising provides you with targeting options that are unsurpassed by any other form of advertising. Because you can target your ads by demographics, geographic locations or keywords, your ads are more likely to reach the people who are most likely to be interested in your product or service. Online advertising is also more affordable and easy to track.It’s flat out cheaper to post ads on the Web than in print form. You also get to track which ads are actually bringing in new customers, which allows you to focus on what’s working and stop what isn’t. Advtise.com the leading pay per click company is offering all the right tools to succeed that. 

5. Use Public Relations to Your Advantage Don’t ever underestimate the power of positive buzz. If you can find a way to get people talking about you, positively that is, you’re well on your way to garnering new customers. And public relations is a great way to do it. Sometimes financial constraints can make it difficult for small businesses to actively pursue the media. So if you can afford to work with a public relations firm, do it. But i f you’re like most small business owners who can’t, then you need to find a way to do some of the work yourself. At the very least, reach out to journalists and explain who you are and what you do. If something new and exciting happens, don’t be afraid to write up a brief press release and send it their way. Be sure that the information you’re giving them is newsworthy, though. If you bother them every time you reach some new goal, you’ll most likely be blacklisted.

6. Send Direct Mail Direct mail is a classic form of marketing, and a classic never dies. When Internet marketing came, however, many people turned their backs on direct mail as an outdated way of reaching out to new customers. But seasoned veterans in the marketing industry still hail it as a highly effective medium, as long as it’s done right. Before sending out your mailings, make sure you have a good list, one that is likely to include many potential customers. You’l l also want to prompt your mail recipients to take action by giving them offers that are hard to refuse or telling them what’s in it for them, not just listing off your features.

7. Buy and Use Sales Leads Purchasing lists of sales leads is a great way to make sure that you’re effectively targeting your marketing efforts. With your list in hand, you can now prime your potential customers with a piece of direct mail. Once you’ve done that, follow up with some cold calling. Though cold calling is not the most glamorous tool for growing your customer base, it is certainly an inexpensive and highly effective way to reach out to would-be customers. After you’ve cold called your list, send out another piece of direct mail. This allows you to remain engaged with the customer, while not feeling intrusive about calling them again.

Individually, each of these tools is a great way to acquire customers. But this isn’t a pi ck-and-choose operation. Feel free to integrate them into a larger marketing campaign. The more attempts you make to reach out to potential customers, the better. But remember, these are just the tools that are going to draw customers to you. Once you get a customer on the hook, so to speak, it’s up to you to earn their business.

To create a great keyword list, you will need to know your website backwards and forwards. You should know what the site features, and just as importantly, you should know what it doesn’t’ feature. The first step is to brainstorm a list of somewhat generic keywords. For example, if you are a shoe store in Poughkeepsie, the temptation will arise to try and rank number 1 for the term “shoes.” Well, that’s a start, but ranking for the word “shoes” is probably aiming a little too high for a mom and pop shop in Upstate New York, which is why it’s very important that you know the site well enough to come up with a good list of pseudo-generic “modifiers” for your keyword:

• Location (Poughkeepsie shoes, shoes upstate New York, shoes 12601)
• Price (cheap shoes, affordable shoes, quality shoes, comfortable shoes etc)
• Types (running shoes, walking shoes, jogging shoes etc)
• Industry specific (anti-pronation shoes)