Carnegie Mellon University MSEC 2004 Leading provider of e-Marketing tools Sep. 23, 2003 S. Cho, C. Lu, J. Park, J. Weinberg, C. Yang, H. Yang Carnegie Mellon University MSEC 2004

OUTLINE Brief History Business Strategy Business Model Financials Competitive Structure Value Chain SWOT Information Technology

Carnegie Mellon University MSEC 2004 Brief History (1) Brief History (1) 1995~1997 : Starting Business to revolutionize Internet advertising 1995 Poppe Tyson formed DoubleClick as its new media division. Kevin O'Connor and Dwight Merriman started Internet Advertising Network (IAN); White Pages directory 1996 Poppe Tyson bought IAN and merged its know-how with DoubleClick's client network and O'Connor became CEO of the new DoubleClick. Developed DART (Dynamic Advertising Reporting and Targeting) Partnership with AltaVista 1997 Launched DoubleClick Direct, a results-based advertising network

Carnegie Mellon University MSEC 2004 Brief History (2) Brief History (2) 1998~2000 : IPO & Broadening services through acquisitions growth 1998 IPO and expanded its client network from 60 Web sites to 1, NetGravity was merged with DoubleClick's Technology Solutions division Branched out into database marketing by acquisition Abacus Direct (90 million buyer profiles and 1,800 merchants) Became the target of a Federal Trade Commission privacy investigation into its data-collection methods Began working with regulators to develop online privacy policies.

Carnegie Mellon University MSEC 2004 Brief History (3) Brief History (3) 2001~ present: : Rethinking its strategy and restructuring 2001 FloNetwork, and L90's ad-serving software IPO DoubleClick Japan Launched Diameter and Internet marketing research Laid off more than 350 employees in 2000 and Refocused on providing e-marketing tools and technology Sold Media business, List Services and acquired MessageMedia 2003 Recast as marketing technology company 1,500 advertisers and publishers, 300 marketers and 1,800 Abacus Alliance members

Carnegie Mellon University MSEC 2004 Business Strategy Vision : Leading provider of e-Marketing tools Mission : “Making marketing work better” Help clients acquire new customers cost effectively. Help clients retain and grow profitable customer relationships.

Carnegie Mellon University MSEC 2004 Business Model – Infomediary Marketers Ad AgenciesWeb Publishers Marketing solutions Marketing Data Clicks

Carnegie Mellon University MSEC 2004 Business Model - products and services (1) Full Suite of Marketing Solutions (Source: DoubleClick.com)

Carnegie Mellon University MSEC 2004 Business Model - products and services (2) Marketing Automation Increase the efficiency of marketing planning, tracking, and analysis MediaVisor, DoubleClick Ensemble Online Advertising Offer ad management and serving solutions for marketers, agencies and web publishers Site Directory DART (DFA, DFP) Marketing Help clients manage and grow powerful programs and enable high performance. DARTmail Premier Self Service Strategic Services Direct Marketing Help marketers target the potential consumers, lower the costs and increase the performance Abacus Catalog Alliance Abacus BtoB Alliance Marketing Analytics Help clients measure performance within and across channels. ChannelView SiteAdvance Data Management Provide marketers with the tools to harness customer data for effective campaigns. Database marketing Apllications Database marketing Strategy

Carnegie Mellon University MSEC 2004 Operating revenue sources - Technology: internet marketing solutions - Data: data analysis, research and collection - Media: internet advertisement sales Financials – Operating revenues (in thousands) Projected: $250,000

Carnegie Mellon University MSEC % 31.2% Technology = 68.8% Data = 31.2% Media = 0% (sold by the end of 2002) Financials – Revenue sources

Carnegie Mellon University MSEC 2004 Operating expense sources - Sales and marketing - General and administrative - Product development: in-house building up Financials – Operating expenses (in thousands) Projected: $150,000

Carnegie Mellon University MSEC 2004 Sales and Marketing = 54.5% General Administration = 23.2% Product development = 22.3% Financials – Expense sources

Carnegie Mellon University MSEC 2004 From 2003, the net income was converted to positive From 2001, the restructuring expenses were increased Financials – Net income (in thousands)

Carnegie Mellon University MSEC 2004 Competitive structure Solution S/W providers Almost no suppliers Due to in-house Solution Suppliers Several competitors DoubleClick dominates the market share Buyers Threat of Substitute Entry Barriers Offline advertising Traditional database system Solution technology (patent such as DART) Data expertise Global network Financial barriers Advertisers Web-publishers Direct marketers

Carnegie Mellon University MSEC 2004 Value chain Inbound Logistics Operations Outbound Logistics Marketing and Sales Services Cookies Customer data Product development Database management Technical solutions Data products Sales Marketers Ad Agencies Web Publishers Customer Training Call center Information Technology (DART, MediaVisor, Abacus, Ensemble, ChannelView) Human Resource Management Sales and Marketing 37%, Engineer 19%, Technician 29%, Staff 15%

Carnegie Mellon University MSEC 2004 SWOT StrengthsWeaknesses Opportunities Threats Reliable & scalable technology Large Database Full suite of customer driven solutions First mover – brand name Global presence – 30 countries Financial strength Marketing experts Short term contracts Revenue structure Short experiences in the international market Not proven business model Relies on internet infrastructure Privacy issue Opt-out option Intense competition Poor perception of the effectiveness of online ads Regulations in spamming Rapid change of business environment Online Ad spending growing Increasing broadband users Growing niche media usage The amount of time and money spent online is growing

Carnegie Mellon University MSEC 2004 Information Technology – IT use Business resources Information TechnologyBusiness Internet, Cookies Online banner Value added Data storage Database management system IT solutions - DART, Ensemble, Abacus etc Targeted banner advertisement Global Internet , Banner Ads, Usage stats Movie files, etc. Distribution / Service

Carnegie Mellon University MSEC 2004 Information Technology – Strategic lever Distinctive and Strategic technology Analyzing and gather click stream data (Source: ConsumerReports.org)

Carnegie Mellon University MSEC 2004 Information Technology – Risks and Benefits Risks Privacy issue Benefits Better advertising: targeting, tracking and reporting Can offer comprehensive IT solutions from Database management to marketing plans and campaigns. “ This Monday, we revealed that the Federal Trade Commission (FTC) began a voluntary inquiry into our ad serving and data collection practices,” - Kevin Ryan, President of DoubleClick Inc., Feb. 17, “ Web users have lost privacy with the drop of a cookie..” – Will Rodger, USATODAY.com-

Carnegie Mellon University MSEC 2004 Q & A

Carnegie Mellon University MSEC 2004 Thank you!