ValueClick fine 2.9 Million by FTC

Category: Online News

While browsing over at seomoz today (see previous post) I came across another juicy event that happened recently. You can find the detailed story here (all credit to seomoz for this great post)

Here is the summary:

Recently, ValueClick and its subsidiaries, Hi-Speed Media and E-Babylon, have been under investigation by the Federal Trade Commission (”FTC”) for alleged violations of the Can-Spam Act and failure to protect consumer’s sensitive information.

The FTC announced today that Valueclick has agreed to pay 2.9 million dollars to settle the charges.

(According to allegations by the FTC, “ValueClick subsidiary Hi-Speed Media used deceptive e-mails, banner ads, and pop-ups to drive consumers to its Web sites. The e-mails and online ads claimed that consumers were eligible for “free” gifts, including laptops, iPods, and high-value gift cards, and included come-ons such as “Free PS3 for survey,” and “CONGRATULATIONS! Select your FREE Plasma TV.”” After being promised the sky, the consumers had to participate in a confusing assortment of expensive and burdensome third-party offers – including car loans and satellite television subscriptions.)

With this news, Valueclick’s stock fell to a 52 weeks low. But a $2.9 million dollar fine will make a dent on a company with reported revenue of 545.6 million, earnings of 62.6 million and operating cashflow of 114.2 million. There has been regular speculation over the last year about whether Valueclick was going to be acquired. Perhaps Valueclick’s current dip in value and the final resolution of the FTC investigation will make it a more attractive candidate to potential purchasers.

This is possibly a good buy for online investors :)