Cox Enterprise Buys Adify to Focus on Digital Future

 By: Mitra Hooman (5/1/2008) 

Cox Enterprises has announced that its Cox TMI subsidiary is buying Adify, a technology and media company focused on vertical online advertising.  The deal is expected to close before the end of May.  While the official announcement doesn’t have a price tag, the Associated Press says the transaction is a $300 million all-cash deal.

Adify will remain a stand-alone company operating under the guidance of its CEO and founder Russ Fradin.  Its clients include adChakra, Forbes, The Guardian, HotChalk, Houseblogs, Martha Stewart, NBC Universal, Reuters, Time Warner, The Washington Post Co. and Yardbarker – and most, if not all, are expected to stay as customers. 

Adify’s technology takes advantage of the fragmented nature of the internet and has created a variety of website networks to allow better targeting of an ad buy.  For example, an advertiser interested in reaching an audience of pet owners can join the Petside Media Network, which is a “pet-related content and advertising network, offering placement on NBC's Petside.com and a handpicked list of the best websites for animal lovers and enthusiasts.”  The Houseblogs network is a collection of home and home improvement blogs.  The Good Health Advertising network is exactly what the name implies, health related sites.  Adify’s website lists 30 networks, and it appears the only limitation on the technology is an advertiser’s imagination.

Cox’s competitors will be treated the same as Cox companies, according to Mr. Fradin.  He also has said that some of his early investors like General Electric Co.’s NBC Universal and Time Warner Inc.’s investment arm plan on cashing out.  NBC will remain a client, though. 

As print ad revenues continue to suffer downward pressure, it’s clear that Cox thinks online is the future.  John Dyer, Cox executive vice president for finance, went on record to say, “We’re absolutely convinced at Cox that online revenue is continuing to grow.”  Dyer added, “If you look at Cox's history, we've not necessarily been the first into a space. ... But we've prided ourselves in the course of history in being early investors.”  Pioneers who get into a space first occasionally become huge, but pioneers also have a high attrition rate.  Cox’s move says that the digital frontier isn’t as wild as it once was.

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