ValueClick acquires paid search engine Search123 in $5 million deal

Industry analysts have pegged fast-growing search as the third largest online market after e-commerce and advertising, and online marketing companies are broadening their reach to gain a foothold in it. The latest is multi-channel marketing company ValueClick Inc., which has acquired Search123.com Inc., a privately held pay-for-performance search engine marketing company, in a deal valued at $5 million. Search123, founded in 1999, operates a cost-per-click search engine using the auction model.

The acquisition expands ValueClick’s lineup of media offerings for its advertising customers into paid search and complements ValueClick`s BeFree affiliate marketing business, the company says. “We have been interested in adding search marketing to our portfolio of digital marketing solutions, and Search123 is a great fit with our business objectives and a significant step toward completing our digital marketing solutions set,” says James Zarley, CEO of ValueClick.

Under the terms of the agreement, ValueClick acquires all outstanding equity interest in Search123 for $3.3 million in cash plus transaction costs and certain other liabilities. Search123 will continue to operate under its own name as a subsidiary of ValueClick.