Widening Its Scope, AppNet Acquires i33

Brandweek, Jan 25, 1999 by Adrienne Mand

In one of the first consolidations of the new year, interactive agency i33 communications, New York, has been acquired by AppNet Systems, an e-commerce solutions company based in Bethesda, Md. Terms were undisclosed.

I33, which develops Web sites and makes AdMaximize, a closed-loop return-on-investment tracking service, was founded in 1995 and employs about 60 people. Its clients include BBDO, Ralston Purina and Sony Electronics. The company will retain its name.

Drew Rayman, president of i33, said that in 1998 the company was approached by "probably every major roll-up" of interactive agencies but waited for a deal with a firm that did not have competing services.

"The way we looked at it, there were these companies that were merging these crappy, unprofitable interactive agencies together," Rayman said. "We didn't want to merge with other interactive agencies."

Plus, he said, "They're not 29-year-old guys ... making the play with ponytails." In fact, AppNet's founder and CEO, Dr. Ken S. Bajaj, formerly was vice chairman of Wang Laboratories and worked at Electronic Data Systems and Perot Systems.

AppNet Systems owns seven other technology companies and is making a bid to provide complete c-commerce services, from sites' engines to interfaces.

Other acquisitions since its founding in 1997 include Logex International of Falls Church, Va., makers of e-commerce products for the retail industry, and Software Services Corporation of Ann Arbor, Mich., which does Web-based application development for manufacturers.

Bajaj sees i33 as the "creative Web development" and branding specialist in the group. He said AdMaximize was an important component "for measuring the effectiveness of ads, traffic and commerce." The tool reports impressions, click-throughs, leads and sales.

"Lots of companies are providing parts of the solution," Bajaj said. "I think we may be the one company that has pulled together the technical expertise to do e-commerce solutions."

Rayman said i33's decision to he acquired by AppNet makes more sense than other companies' strategies of growing for the sake of having mass.

"You shouldn't be merging for anything other than the benefits of your client specifically."