24/7 Real Media and Dentsu Inc form joint venture to deliver Search Engine Marketing Services in Japan
New Venture with Japan's Largest Advertising Company to Market 24/7 Real Media's Decide DNA-powered SEM Services to Dentsu's World-class Client Base and Others
NEW YORK and TOKYO - September 7, 2005 - Interactive marketing and technology pioneer, 24/7 Real Media, Inc. (Nasdaq: TFSM), and Dentsu Inc. (4324.T), Japan's largest advertising company, today announced the establishment of K.K. 24-7 Search, which will deliver a full spectrum of search engine marketing ("SEM") services to the Japanese market. The partnership, in which Dentsu owns a significant minority interest, has simultaneously entered into an agreement to be the exclusive provider of SEM services to Dentsu's extensive world-class client base. Financial terms were not disclosed.
Under the terms of the agreement, Dentsu will contribute its extensive Japanese marketing industry knowledge and connections to the joint venture, and consign to the joint venture all SEM services provided to its clients. 24/7 Real Media will license its industry-leading Decide DNA technology to the joint venture, as well as provide search engine marketing expertise and operational management. Jae Woo Chung, president of 24/7 Real Media Asia and head of the company's Tokyo office, will serve as Representative Director and head the new venture.
The Dentsu Group is the fifth largest advertising group in the world with more than 6,000 clients, both domestic and global, and annual revenues of approximately $3 billion. 24/7 Real Media is a global leader in interactive marketing and the rapidly growing area of paid search. The company's Decide DNA search engine marketing technology is the number one-ranked SEM platform according to Jupiter Research, which deemed it to be the "most advanced bid management technology" in the marketplace.1 Japan is currently the Asia-Pacific region's largest online advertising marketplace.
"As the largest, most prestigious advertising company in Japan, Dentsu is unquestionably the ideal corporate partner to help us quickly become the leader in the Japanese paid search market and capture a significant share of the sizable future revenue opportunities that exist there," said David J. Moore, chairman and CEO of 24/7 Real Media. "The powerful combination of our leading edge technology and Dentsu's market leadership in Japan and global stature will immediately establish K.K. 24-7 Search as the paid search agency of choice for Dentsu's existing clients. We also are confident that this joint effort will position 24/7 Real Media for rapid growth as more and more Japanese companies discover the effectiveness and cost advantages of utilizing paid search marketing solutions. Finally, another clear advantage we have over competitors is that our Decide DNA technology is already fully operational for the Japanese market."
According to the Dentsu Communications Institute, the Japanese paid search market is on pace to reach approximately $550 million in 2005. Japan has the second highest number of Internet users after China, and the highest number of broadband Internet users in the Pacific Rim, according to PriceWaterhouseCoopers2. It is also the second largest online advertising market globally, behind the United States, with revenues projected to increase nearly 20 percent to $1.7 billion by the end of this year.
"SEM is currently forecasted to achieve the highest growth rate within the Japanese online advertising market," said Hideyuki Nagasawa, director, interactive communications division of Dentsu. "24/7 Real Media's innovative technology will contribute to the Dentsu Group's expertise, thereby allowing us to achieve a higher competitive edge in this important field. We believe the new company is poised to become a powerful leader in the Japanese SEM market."
Since entering the Japanese market earlier this year with the opening of its Tokyo office in February, 24/7 Real Media has focused its expansion efforts in Japan primarily on the fast growing SEM business via its 24/7 Search division. Powered by its Decide DNA technology, 24/7 Search offers the only integrated platform for keyword bid management, search content feed management and organic search management.
"The establishment of this joint venture with Japan's premier advertising agency is a significant milestone in our efforts to enhance our presence in Japan and grow our broader footprint in the Asia-Pacific region," added Jae Woo Chung, president of 24/7 Real Media Asia. "We look forward to working in tandem with the very experienced and astute senior management team at Dentsu to leverage the growing adoption of paid search in Japan and ensure that this joint venture is a highly successful operation for both companies moving forward."
As majority owner, 24/7 Real Media will begin to report consolidated financial results including the joint venture, which is not expected to have a meaningful impact for 2005. Additional details will be provided during 24/7 Real Media's third quarter earnings call in early November.
1 Jupiter Research - "Search Engine Marketing Agency Constellation Survey" - November 2004
2 PriceWaterhouseCoopers -"Global Entertainment and Media Outlook: 2005 - 2009" May 2004
About Dentsu Inc.
Founded in 1901, Dentsu Inc. is one of the largest advertising companies in the world and has held the largest share of the Japanese market for years. The Dentsu Group has more than 15,000 employees around the world, and its diversified portfolio of more than 6,000 clients includes long-standing relationships with many leading domestic and global corporations. Numerous subsidiaries and affiliated companies, including Publicis Groupe S.A., provide Dentsu with a strong presence in North America, Europe and Asia. Beijing Dentsu Advertising Co., Ltd., a venture formed in 1994, is the top agency in China based on billings and revenue. More information about Dentsu Inc. can be found at http://www.dentsu.com/.
About 24/7 Real Media, Inc.
24/7 Real Media, a pioneer in interactive marketing and technology, targets and delivers audiences for publishers and marketers. Our customers generate increased revenue and profits through media and search services, coupled with one seamless platform of serving, targeting, tracking and analytics technologies. The company is adquartered in New York, with offices in other major U.S. cities, Canada, Europe and Asia. For more information, please visit www.247realmedia.com. 24/7 Real Media: Delivering Today. Defining Tomorrow.
24/7 Real Media is a member of the NAI and adheres to the NAI privacy principles that have been applauded by the FTC. These principles are designed to help ensure Internet user privacy. For more information about online data collection associated with ad serving, including online preference marketing and an opportunity to opt-out of 24/7 Real Media cookies, go to: www.networkadvertising.org.
Caution concerning forward-looking statements:
This news release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are naturally subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to changes in economic, business, competitive and/or regulatory factors. More detailed information about those factors is set forth in our filings with the Securities and Exchange Commission. In addition, the following factors, among others, could cause actual results to differ materially from those described herein: the potential for impairment of relationships with employees or major customers, loss of faith in Internet advertising, international risks, regulatory risks, and other economic, business, competitive and/or regulatory factors affecting the businesses of 24/7 Real Media. All information in this release is as of September 7, 2005. The Company is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
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