Ybrant to buy US firm

Business Standard

Chennai / Hyderabad May 16, 2008 – Hyderabad-based Ybrant Digital is looking at acquiring an online marketing company in the US for $100 million (approximately Rs 400 crore) this year, its fourth buyout so far.

“We are close to signing an LoI (letter of intent) and expect to seal the deal this year. Some of the areas that the target company operates in include content-based mobile advertising,” chairman and managing director Suresh Reddy said. The zero-debt company would fund the buyout through a combination of debt and equity for which it is currently working out modalities.

In 2006, Ybrant had acquired two companies – Serbia-based Seenietix and US-based MediosOne – for undisclosed amounts. In 2007, it acquired US-based online ad-network company AdDynamix for $10 million (about Rs 40 crore).

Meanwhile, having created a niche for itself in the digital marketing arena serving direct marketers, brand advertisers and marketing agencies across the globe, the company has now set sights on the mobile advertisement space.

It has ambitious plans to move into the mobile advertisement space as this segment is bound to grow rapidly considering the fact that content-based advertising driven by mobile search and SMS keywords is far more effective and less intrusive than its traditional counterparts (online), Reddy said.

“Penetration of mobile phones is higher as compared with Internet and the gap is closing due to increasing migration from low-end to feature-rich high-end mobiles. We are excited about this opportunity and want to get into it. We are currently evaluating a couple of ideas including content-based advertising and would soon align with cellular service providers. We should be entering the European, Indian and Chinese mobile advertising markets during this year, harnessing the marketing power of our existing advertisers and publishers globally,” he added.

According to an E-marketers report, the global advertisement market totals about $500 billion, of which $25 billion is expected to be allocated to mobile phones. There are over one billion mobile subscribers worldwide, with around 300 million being in India alone.

Ybrant Digital closed the 2007-08 financial year with a $ 6-million (Rs 24 crore) net profit on revenues of $25 million (Rs 100 crore) and expects its topline to double this fiscal as it would be integrating its subsidiaries into the parent company soon, Reddy said.

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