Is Tribal Fusion for Sale?


ADOTAS EXCLUSIVE — A potential buyout of ad network Tribal Fusion has been generating some serious buzz on and offline. With a possible $800 million asking price, many people are weighing in on the potential dollar amount, the possible suitors and what this means for interactive advertising networks. Some say it’s ridiculous – “never gonna happen!” — while others politely support and hope that such valuations could stand. But to take a well-rounded look at the firm and any potential deal, let’s go back to the beginning shall we?

Dilip DaSilva, the company’s founder and president and CEO of Exponential, Tribal Fusion’s parent company, has an extensive background in technology and online media. He was heavily involved with Flycast Communications, having designed and built ad-serving systems for the company’s ad network. The company was a big dog in the still young industry of online advertising before the infamous dotcom crash. In 1999 the company went public and was acquired that year by CMGI for $690 million. The company later became apart of Engage and eventually went down in flames where assets were sold off to various parties into what are very successful companies today.

In 2001, DaSilva founded Tribal Fusion and it continues to function as a leading ad network, according to the company’s Web site. In 2006, DaSilva launched two sister businesses under Exponential: FullTango, a performance marketing firm, and LeadGenuity, a lead generation company. Last year, DaSilva launched EchoTopic, a contextual advertising business, ensuring a root in the profitable aspects of online advertising.

Tribal Fusion is an ad network that deals with all traditional ad types as well as rich media. The company has had a relatively positive reputation amongst other ad networks and media companies in the industry and many do not find it surprising that the firm could potentially be snapped up. Russ Fradin, CEO of Adify and former co-worker of DaSilva stated, “Tribal Fusion has always been well-known in the industry for a deep focus on quality reach, customer support and great technology. It would not surprise me at all if they were acquired — I have always heard great things about them. It is easy to build an ad network, much harder to build a quality ad network that delivers a great product to advertisers.”

“Tribal Fusion was one of the first ad networks to provide a greater level of transparency by bringing site disclosure back to the forefront, and organizing their sites into 15 content channels with more than 100 sub-channels,” said Jonathan Shapiro, CEO MediaWhiz, a leading performance-based online marketing company. “Today, more and more advertisers are demanding complete visibility and understanding of the sites which they are running. Their publisher relationships thrive on the use of their free proprietary ad-serving solution and its ability to not only access CPM offers but also allow publishers to serve ads sold through directly.”

Looking at the market climate over the past year also brings no surprise to expert ears over the rumor of Tribal Fusion and the possible Craig’s List listing. Fradin added: “Given the massive fragmentation on the web thanks to increasing broadband penetration, search engines, easy publishing tools, record financing of content companies, etc… audience aggregation by large properties is vital. It would not be a surprise if a large media company of ad agency wanted to buy a quality ad network like Tribal Fusion.”

When asked why Tribal Fusion’s business may be an attractive sale, Shapiro answered, “Their technology has some interesting unique features such as their most recent rollout, Dynamic Ads, which allows advertisers to dynamically insert copy into ads based on various targeting criteria such as geography, demographics, behavior, etc.” He added: “However, ad serving technologies have become more of a commodity in the marketplace today. Their [Tribal Fusion’s] value for sale could lie more in the reach of both advertisers and publishers which on any given month is one of the highest of any independent ad network out there.”

Considering potential suitors for the firm raised eyebrows and generated some interesting water-cooler chat. “There aren’t too many potential suitors with the cash needed to afford the rumored asking price of Tribal Fusion but logically you would think that Rupert Murdoch may want to expand with a pureplay ad network and ad serving solution. People are forgetting about IAC since all of their attention has been spent on their court case with Liberty Media,” Shapiro mused. “The approval to restructure their interactive properties could have Barry Diller looking to grow his branch in an attempt to form synergies with their advertiser, publisher reach and ad serving solution.”

In the beginning of a potentially major recession, Shapiro is correct in saying few companies have the cash ready to drop on an ad network at this price. Even Blue Lithium, another CPM Ad Network, sold to Yahoo last year for $300 million dollars and many have commented off the record that it has a stronger standing in the industry than Tribal Fusion, making some of its critics scoff at such inflated rumored prices.

“Speaking about CPM ad networks and looking at the acquisition of Blue Lithium last year, I can tell you Tribal’s business is not worth $800 million-$900 million by comparison alone,” stated an anonymous source. The source, a media professional close to the situation continued by saying that any truth to this rumor would prove shocking because it involves a CPM Ad Network. “CPM is a dwindling business and Performance (CPA/CPC) has surpassed it in terms of Overall Ad Revenues.” Another source agreeing with these sentiments, saying it was interesting that Tribal Fusion may be valued at such a price since it has not raised any funding before.

An affiliate expert who also expressed to remain anonymous felt an acquisition was highly unlikely saying “We’re actually seeing a lot of dollars shift to performance-based marketing (CPA and to some extent CPC) away from CPM, consistent with industry trends over the last five years that many outlets have reported.”

There has been much debate between the efficiency of buying media on a CPA or CPM and the future success of ad networks who do CPM. In the end most purchases work around yield performance and many direct response performance advertisers have no interest in CPM purchases. There has been a lot of speculation that as we enter a recession that CPM ad networks will struggle much more than performance CPA based ones. This doesn’t reflect well on high multiple sales.

Many comments received by ValleyWag did not look favorably upon the company or the possible sale either. “These guys will be lucky to get half this amount. Their CEO overplayed his hand long ago when he really did have a good deal on the table,” said username sggrf who also went on to add an interesting side thought: “Their COO just left. Is he stupid or does he know something? My guess is that he knows something.” The previous source echoed the thoughts on the COO’s departure wondering why he would leave if there could potentially be a presumed liquidity event happening at such high multiples. Tribal Fusion was not available for comment.

Although the rumor has not been confirmed nor denied by any party, source or corporate e-mail, the purchase of Tribal Fusion may signify another growth-spurt opportunity for online advertising. Shapiro concluded by saying, “It seems that ad networks that get acquired seem to slow down on innovation and growth as they focus on integration. This has left room for independent ad networks to grow and startups to develop new and innovative solutions for online advertising.”


  1. I don’t think the COO was stupid for leaving. He became CEO at another joint, hard to pass up a career boost like that. He was probably tired of waiting for the pay day that might never arrive.

  2. Yeah, I think that’s the point though. That if a sale was imminent at $800 million, he probably would have held on a bit longer as a sale of that magnitude would have helped his career in other ways I’m sure.

  3. Seems to me that the CPM agency network model is under fire with various companies taking charge of their own vertical, ie, and Ebay. As Google and Yahoo get more syndicated the cpm network model faces real challenges. If they are being offers $800M, I’d grab it and run.

  4. I’m not sure where the data came from saying advertisers are leaving CPM for CPA/CPC campaigns. Performance-based campaigns are the ultimate goal, but it’s incredibly hard to find them as well as any volume. I’ve had experience with CPA-based campaigns on the big 3 portals and the inventory allocated is 1/50th of the CPM remnant campaigns or guaranteed CPM.


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