By Sean Fenlon on November 20, 2007
So, I literally heard just moments ago that AT&T agreed to buy Ingenio.
I’m certain all readers are very familiar with AT&T.
I first heard of Ingenio in 2003. They were an early leader in developing pay-per-call (PPC) software. What I felt made them unique when compared to other pay per call software players in the space (i.e. Voicestar, eStara, Who’s Calling, etc.) was that they built a supply-side network in addition to enterprise-class software. In other words, they had COGS, whereas most companies that sell software do not. But their COGS were performance-based (on a pay-per-call basis, of course), which immediately commanded my respect.
However, Ingenio does NOT have a consumer brand or reach. THAT is the genius of this deal. Whereas Ingenio had to act essentially as white label on the B2B side of a company who actually HAD a direct B2C consumer touch (i.e. AOL), AT&T represents that and more as a single company.
Bravo to the founders and management team of Ingenio.
Now more on the deal analysis side…
I read through the press release and infer several key thoughts. In this space, we all struggle as branding and corporate-communications marketers with “what name should we call it.” Pay-per-call may describe the cost structure, but not the product. AT&T and Ingenio have decided on the term “phone leads” as their collective product:
Ingenio’s Pay Per Call service is an advertising platform that allows businesses to manage their ad programs and generate valuable phone leads.
I also was thrilled to see a term I doubt has ever been a part of the AT&T vernacular – “performance-based”:
Integrating Ingenio’s Pay Per Call technology will enable AT&T to take advantage of a growing trend toward performance-based advertising.
So, on the outside, we’d all love to know how much, at what multiples, etc., but none of that juicy information was disclosed. We’ll have to rely on the rumors of the blogosphere for that. However, a tiny bit of information could also be inferred about the deal value from the press release:
The transaction is expected to have minimal impact on AT&T’s results, including earnings per share.
So what exactly does that mean? That means that Ingenio’s profits probably will not show up on the radar of $7+ Billion in net profits AT&T will book next year. J
That said, apparently AT&T execs see the value in a business that is able to connect live, genuinely-interested, and qualified consumers to sales professionals via “phone leads.”
Who can argue? ;-)
So here’s the summary of how I’m processing this deal: