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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 11, 2000
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DOUBLECLICK INC.
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(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 000-23709 13-3870996
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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450 WEST 33RD STREET, NEW YORK, NEW YORK 10001
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 683-0001
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On January 11, 2000, the Company entered into a strategic agreement to
invest $85 million in ValueClick, Inc., a Delaware corporation located in
Carpinteria, California. A copy of the press release issued by the Company on
January 13, 2000 announcing the agreement to enter into this transaction is
incorporated herein by reference and included as Exhibit 99.1 hereto.
On January 18, 2000, the Company issued a press release announcing its
earnings for the quarter and year ended December 31, 1999. This press release is
attached hereto as Exhibit 99.2, and the information contained therein is
incorporated herein by reference.
The following documents are filed as exhibits:
99.1 Press release issued by the Company on January 13, 2000
announcing the Company's investment in ValueClick, Inc.
99.2 Press release issued by the Company on January 18, 2000
announcing the Company's earnings for the quarter and year
ended December 31, 1999.
-2-
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOUBLECLICK INC.
Date: January 26, 2000 /s/ Stephen R. Collins
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Name: Stephen R. Collins
Title: Chief Financial Officer
-3-
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EXHIBIT INDEX
99.1 Press release issued by the Company on January 13, 2000
announcing the Company's investment in ValueClick, Inc.
99.2 Press release issued by the Company on January 18, 2000
announcing the Company's earnings for the quarter and year
ended December 31, 1999.
-4-
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FOR IMMEDIATE RELEASE
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CONTACTS: DOUBLECLICK VALUECLICK
Jennifer Blum Guy Hill
212.381.5705 805.684.6060 ext. 216
[email protected] [email protected]
Adam Miller (Investors) Alexx Wood
Abernathy MacGregor Bravo!Marketing
212.371.5999 415.777.0800 ext. 107
[email protected]
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DOUBLECLICK INC. MAKES $85 MILLION STRATEGIC INVESTMENT IN VALUECLICK, INC.
NEW YORK and CARPINTERIA, CALIFORNIA, January 13, 2000 - DoubleClick Inc.
(Nasdaq: DCLK), the industry's leading Internet advertising solutions company,
and ValueClick, Inc., an industry leader of performance-based Internet
advertising solutions, today announced that DoubleClick has invested $85 million
in ValueClick, in exchange for a 30% equity stake. Under the terms of the deal,
ValueClick will receive $75 million in DoubleClick stock and $10 million in
cash. In addition, DoubleClick has received a warrant to buy another 15% of
ValueClick within 15 months.
DoubleClick's investment gives the company a strategic relationship in a
performance based advertising network that utilizes a cost-per-click model. In
addition, ValueClick, which currently uses an in-house ad serving solution and
served 1.3 billion ads in December 1999, will work with DoubleClick to integrate
its proprietary technology platform with DART, DoubleClick's full-service ad
serving solution. ValueClick has created a technology architecture designed to
aggregate thousands of web sites. Currently, ValueClick has over 11,000 sites in
its network and serves ads that reach 25% of U.S. Internet users, according to
Media Metrix.
"We look forward to working with ValueClick to help them maximize the benefits
of utilizing our DART ad serving technology," said Kevin O'Connor, CEO of
DoubleClick. "The company has an excellent management team, and has carved out a
leadership position with its cost-per-click business model."
-- more --
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"Our flexible technology platform and our business model have created an
exciting opportunity for us to form technology partnerships that give our
customers additional targeting capabilities," stated James Zarley, CEO of
ValueClick. "We are extremely pleased to be recognized by DoubleClick as a sound
business and a smart strategic investment."
The new capital will be used to support ValueClick's continued growth and
expansion efforts, including acquisitions, as well as to further develop its
performance-based advertising solutions. In conjunction with the financing,
DoubleClick will gain two seats on ValueClick's Board of Directors. This funding
will not alter ValueClick's plans for additional financing or other sources of
capitalization.
ABOUT VALUECLICK, INC.
ValueClick, Inc. (www.valueclick.com) is a leading global Internet advertising
network providing performance-based banner advertising solutions to advertisers
and Web publishers. Based on the "cost-per-click-through" pricing model,
advertisers pay only for "click-throughs" to their Web site, giving them a
cost-effective solution for attracting targeted, high quality customers.
Publishers are guaranteed revenues from 100% sell-out of their online
advertising inventory. Reaching 25% of the U.S. Internet population with over 40
million ads daily, ValueClick is among the e-commerce community's largest
advertising networks.
ABOUT DOUBLECLICK INC.
DoubleClick Inc. (www.doubleclick.net) is a leading provider of comprehensive
global Internet advertising solutions for marketers and Web publishers.
Combining technology, media and data expertise, DoubleClick centralizes
planning, execution, control, tracking and reporting for online media campaigns.
Abacus Direct, a division of DoubleClick Inc., manages the Abacus Alliance, the
nation's largest proprietary database of consumer buying behavior used for
target marketing purposes on the Internet and through direct mail. DoubleClick
Inc. has Global headquarters in New York City and maintains over 30 offices
around the world.
This news release contains statements of a forward-looking nature relating to
the future events or the future financial results of DoubleClick. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, investors should
specifically consider the various factors which could cause actual events or
results to differ materially from those indicated from such forward-looking
statements, including the matters set forth in DoubleClick's reports and
documents filed from time to time with the Securities and Exchange Commission.
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[DOUBLECLICK LOGO]
www.doubleclick.net
CONTACTS: DoubleClick Inc.
Investor Relations: Ilona Nemeth
Sara Pasko
212-271-CLICK (2542)
Abernathy MacGregor Frank
Adam Miller
212-371-5999
FOR IMMEDIATE RELEASE
DOUBLECLICK REPORTS 128% INCREASE IN 1999 SYSTEM REVENUES TO
$316.8 MILLION
CLOSED FIVE MERGERS AND ACQUISITIONS IN THE FOURTH QUARTER
NEW YORK, NY, JANUARY 18, 2000 -- DOUBLECLICK INC. (NASDAQ: DCLK), the leading
provider of global advertising and marketing solutions for advertisers and Web
publishers, today announced financial results for the fourth quarter and year
ended December 31, 1999. The financial results for prior periods have been
restated to reflect the pooling of interests accounting treatment of the mergers
with NetGravity, Abacus Direct, and Opt-in Email.com. Segment revenues are
stated before inter-segment eliminations.
DoubleClick reported system revenues of $114.6 million for the fourth quarter of
1999, a 26% increase over the third quarter and a 150% increase the same period
last year. The Company reported system revenues of $316.8 million for the year
ended December 31, 1999.
In the fourth quarter of 1999, revenues grew sequentially 24% to $93.7 million,
resulting in a recurring loss of $3.1 million, or $0.03 per share adjusted for
the 2-for-1 stock split effective January 10, 2000. Direct transaction,
integration and facility relocation charges brought the net loss to $42.1
million, or $0.38 loss per share.
For the year ended December 31, 1999 the Company generated revenues of $258.3
million, an increase of 86% as compared to $138.7 million in 1998. The recurring
loss for the year 1999 was $14.2 million, or $0.13 loss per share. Direct
transaction, integration and facility relocation charges brought the net loss to
$55.8 million, or $0.51 loss per share. This compares to a net loss of $0.21 per
share in 1998.
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% Increase % Increase
($ in millions) 4Q99 3Q99 4Q/3Q 1999 4Q98 4Q99/4Q98
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System Revenues (a) $114.6 $90.8 26% $45.8 150%
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Revenues $93.7 $75.3 24% $45.8 105%
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(a) System revenues include revenues earned by DoubleClick with respect to
network sales relating to publishers which are part of the DoubleClick
Network, fees earned from independent publishers and advertisers which use
the DART technology to deliver ad impressions, and amounts invoiced on
behalf of AltaVista, pursuant to the Advertising Services Agreement.
"In 1999, we continued to focus on positioning DoubleClick to be at the
forefront of advertising and marketing service providers," said Kevin O'Connor,
Chairman and CEO of DoubleClick. "We remain focused on solving the needs of our
customers through innovation of new products and strength in execution."
TECHNOLOGY
For the fourth quarter, the global TechSolutions division reported record
revenues of $28.7 million, a sequential increase of 45%. This division also
signed a record number of new clients in the fourth quarter of 1999, including
software and service solutions, to provide best-in-class solutions for customers
such as Cisco. For the fourth quarter, 198 new clients have signed with
DoubleClick to use proprietary ad-serving technology for a total of 1050
publishers by year-end.
Additionally, DoubleClick solutions for advertisers have been increasing market
presence, ending the year with 149 advertisers and agencies using the unique
DART-for-Advertiser solutions, representing 445 end clients. The globally
scaleable DART platform continues to serve a growing share of all ads served on
the Internet: in December DART delivered nearly 30 billion ads, breaking over 1
billion ads/day in November. In the fourth quarter 1999, DoubleClick served over
77 billion ads, an increase of 71% over the 45 billion ads served in the quarter
ended September 1999.
THE ABACUS GROUP
In the fourth quarter, the Company's merger with Abacus Direct was finalized.
The Abacus Direct division reported revenue of $17 million, an increase of 36%
over the fourth quarter of 1998. Abacus Direct continues to grow the
contributing members, adding another 81 in the fourth quarter, and increasing
the members in the new Retail and B2B verticals. Over 1,565 members contribute
to the Abacus Alliance as of December 31, 1999, up 26% from year-end 1998.
MEDIA
As more users spend more time on the Web, advertisers allocate more of their
budgets to this medium. Accordingly, system revenues increased to $71.8 million
for the fourth quarter, as compared to $50.1 million in the third quarter, or a
record increase of 43%. For the year 1999, Media systems revenue totaled $184.0
million, an increase of 148% over $74.2 million in 1998. Twenty-seven percent of
all ads served by DART in 1999 were served into the DoubleClick Networks.
This quarter DoubleClick added a number of significant new publishers to the
Select network, such as Fodor's Travel, NASDAQ and Hewlett Packard. The total
number of Web publishers serviced on the US DoubleClick Network increased to 139
by year-end, up from 80 in 1998.
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INTERNATIONAL
DoubleClick continues to expand its international infrastructure, such that the
Company now has a presence in 20 countries. System revenues from DoubleClick
International grew 52% in the fourth quarter to $21.9 million compared to the
third quarter. International revenue now comprises 19% of total DoubleClick
revenue. Internationally, DoubleClick now provides solutions for 611 publishers
and approximately 1,470 advertisers.
CORPORATE DEVELOPMENT
DoubleClick completed a number of significant strategic initiatives during the
fourth quarter, including:
Merged with Abacus Direct, the leading transactional database and service
provider for the direct marketing industry, which closed in November;
Merged with NetGravity, a leading software provider for ad-serving
technology, which closed in October;
Acquired the remaining shares in the Spanish and Scandinavian DoubleClick
units;
Merged with Opt-In Email.com, a leader in Internet email marketing,
publishing and list management, which closed in November.
Additionally, last week the Company announced an investment in ValueClick, a
provider of performance-based Internet advertising solutions.
These activities augment DoubleClick's position as the premier solutions
provider for information-intensive Web-based advertising and marketing. The
Company intends to pursue additional capital financing in the near term in order
to continue to build assets and maintain competitive positioning.
ABOUT DOUBLECLICK
DoubleClick Inc. (http://www.doubleclick.net) is a leading provider of
comprehensive global Internet advertising solutions for marketers and Web
publishers. Combining technology, media and data expertise, DoubleClick
centralizes planning, execution, control, tracking and reporting for online
media campaigns. Abacus Direct, a division of DoubleClick Inc., manages the
Abacus Alliance, the nation's largest proprietary database of consumer buying
behavior used for target marketing purposes on the Internet and through direct
mail. DoubleClick Inc. has global headquarters in New York City and maintains
over 30 offices around the world.
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DOUBLECLICK INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
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Quarter ended December 31, Year ended December 31,
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1999 1998 1999 1998
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(unaudited) (unaudited)
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SYSTEM REVENUES $ 114,589 $ 45,797 $ 316,754 $ 138,724
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REVENUES:
Media $ 50,914 $ 26,681 $ 125,499 $ 74,180
Technology 28,695 9,062 74,695 24,965
Data 16,974 12,521 65,961 46,979
Intersegment elimination (2,893) (2,467) (7,861) (7,400)
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Total revenues 93,690 45,797 258,294 138,724
Cost of revenues 41,582 24,224 107,156 69,191
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Gross profit 52,108 21,573 151,138 69,533
Operating expenses
Sales and marketing 35,316 15,422 103,578 52,525
General and administrative 13,193 5,842 36,306 19,424
Product development 8,484 3,836 28,364 12,194
Direct transaction, integration and
facility relocation charges 39,085 - 41,605 360
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Total operating expenses 96,078 25,100 209,853 84,503
Loss from operations (43,970) (3,527) (58,715) (14,970)
Interest and other, net 2,926 1,213 11,481 3,997
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Loss before provision for income taxes (41,044) (2,314) (47,234) (10,973)
Provision for income taxes 1,103 1,757 8,587 7,066
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NET LOSS $ (42,147) $ (4,071) $ (55,821) $ (18,039)
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BASIC AND DILUTED NET LOSS PER SHARE $ (0.38) $ (0.04) $ (0.51) $ (0.21)
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NET LOSS BEFORE DIRECT TRANSACTION, INTEGRATION
AND FACILITY RELOCATION CHARGES $ (3,062) $ (4,071) $ (14,216) $ (17,679)
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BASIC AND DILUTED LOSS PER SHARE BEFORE DIRECT
TRANSACTION, INTEGRATION AND FACILITY
RELOCATION CHARGES $ (0.03) $ (0.04) $ (0.13) $ (0.21)
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WEIGHTED AVERAGE SHARES USED IN BASIC AND
DILUTED NET LOSS PER SHARE CALCULATION 111,325 96,432 109,756 86,248
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DOUBLECLICK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31,
(IN THOUSANDS)
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1999 1998
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ASSETS
Cash and cash equivalents and investments in
marketable securities $444,803 $181,876
Accounts receivable, net 92,873 49,687
Prepaid expenses and other assets 35,276 6,849
Property and equipment, net 61,980 21,702
Intangible assets 94,475 247
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TOTAL ASSETS $729,407 $260,361
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LIABILTIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 82,614 $ 42,645
Deferred revenue and other current liabilities 29,783 7,904
Convertible subordinated notes and other long-term obligations 255,348 3,041
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TOTAL LIABILITIES 367,745 53,590
STOCKHOLDERS' EQUITY 361,662 206,771
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $729,407 $260,361
========== ==========
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DOUBLECLICK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
DoubleClick Inc. ("DoubleClick") and its wholly-owned subsidiaries.
System revenues are presented to provide a basis for comparing DoubleClick's
revenues, including those relating to AltaVista Company ("AltaVista"). Effective
January 1, 1999, the Advertising Services Agreement with AltaVista was amended
resulting in changes in the business relationship between the companies. As a
result, DoubleClick recognizes revenues from DART service fees, sales
commissions and billing and collection fees derived from the sale and delivery
of ads on the AltaVista Web site and associated services. Through December 31,
1998, DoubleClick recognized gross revenues related to ads delivered to the
AltaVista Web site.
In April 1999 and January 2000 DoubleClick effected two-for-one stock splits in
the form of 100 percent stock dividends. The splits were approved for
shareholders of record as of March 22, 1999 and December 31, 1999, respectively.
Accordingly, all share and per share amounts have been restated to reflect the
stock splits.
2. MERGERS AND ACQUISITIONS
NetGravity, Inc.
On October 26, 1999, DoubleClick consummated its merger with NetGravity, Inc., a
leading provider of interactive online advertising and direct marketing software
solutions. Under the terms of the merger, which is being accounted for as a
pooling of interests, each share of NetGravity common stock was converted to
0.28 shares of DoubleClick common stock, totaling approximately 10.2 million
shares.
Abacus Direct Corporation
On November 23, 1999, DoubleClick consummated its merger with Abacus Direct
Corporation ("Abacus"), a leading provider of specialized consumer information
and analysis for the direct marketing industry. Under the terms of the merger,
which is being accounted for as a pooling of interests, each share of Abacus
common stock was converted to 1.05 shares of DoubleClick common stock, totaling
approximately 21 million shares.
OPT-IN EMAIL.COM
On November 30, 1999, DoubleClick consummated its merger with Opt-In Email.com,
a leader in Internet email marketing, publishing and list management. Under the
terms of the merger, which is being accounted for as a pooling of interests,
200,000 shares of DoubleClick common stock were issued.
<PAGE>
DOUBLECLICK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
DOUBLECLICK SCANDINAVIA AB
On December 29, 1999, DoubleClick acquired 90.7 percent of the outstanding
shares of DoubleClick Scandinavia AB it did not previously own in a business
combination to be accounted for as a purchase. In the transaction, the shares of
DoubleClick Scandinavia AB not owned by DoubleClick were exchanged for an
aggregate of approximately 790,000 shares of Company common stock. Additional
shares of Company common stock are contingently issuable through March 2002
based on the revenues achieved by DoubleClick Scandinavia AB. The results of
operations are included in the consolidated statement of operations from
December 29, 1999.
DOUBLECLICK IBEROAMERICA
On November 4, 1999, DoubleClick acquired the remaining 90 percent of the
outstanding shares of DoubleClick Iberoamerica not previously owned for
approximately $1.3 million. The acquisition is being accounted for as a
purchase, whereby goodwill will be amortized on the straight-line basis over a
three-year period. The results of operations are included in the consolidated
statement of operations from November 4, 1999.
3. DIRECT TRANSACTION, INTEGRATION AND FACILITY RELOCATION CHARGES
Costs associated with the mergers discussed above and the relocation of
DoubleClick's corporate office primarily include investment banking and
financial advisory fees, consulting, and duplicative equipment and rental costs.
For the year ended December 31, 1999 approximately $31.1 million, $7.6 million,
and $2.9 million are related to direct transaction, integration and facility
relocation charges, respectively. All costs were incurred in the fourth quarter,
with the exception of $2.5 million of facility relocation costs incurred during
the nine months ended September 30, 1999. All costs incurred in 1998 related to
Abacus' facility relocation charges.
4. INCOME TAXES
The provision for income taxes does not reflect the benefit of DoubleClick's
historical losses due to limitations and uncertainty surrounding realization.
The provision for income taxes recorded in 1999 and 1998 relate to Abacus prior
to the merger on November 22, 1999.
5. LOSS PER COMMON SHARE
Basic net income (loss) per share is computed by dividing the net income (loss)
by the weighted average number of shares of common stock outstanding. Diluted
income (loss) per common share adjusts for the effect of convertible securities,
stock options and other potentially dilutive financial instruments only in the
periods in which such effect would have been dilutive.
<PAGE>
This release contains forward-looking statements that involve risks and
uncertainties. The results or events predicted in these statements may differ
materially from actual future events or results. Factors that could cause actual
events or results to differ from anticipated events or results include the
Company's limited operating history, history of losses and anticipation of
continued losses, the Company's dependence on its relationship with AltaVista,
the Company's Web publisher concentration and dependence on a limited number of
advertisers, the Company's reliance on the DoubleClick Network, and other risks
that are contained in documents which the Company files from time to time with
the Securities and Exchange Commission. For a discussion of such risks, see the
Company's documents filed from time to time with the Securities and Exchange
Commission.
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