Posted by Julie M. Katz on January 24, 2008
[Posted by Julie Katz]
About a month ago, I completed a Wave of eight email service providers, a point-in-time snapshot of ESP capabilities and strategy. Blink your eyes for just a second though, and the market shifts. I just got word that previously independent ESP e-Dialog has been acquired by e-commerce and multi-channel solutions provider GSI Commerce. The news is not a complete shocker, since e-Dialog has been looking to sell and satisfy investors for a while now. Teaming with GSI Commerce will help e-Dialog extend its foothold in the retail space. Here are some details of the deal. e-Dialog:
- Cashes out for $157 million. That's a whopping expression of the value of email, considering e-Dialog's 12-month EBITDA (Earnings before interest, taxes, depreciation and amortization) of $6.5 million.
- Retains its independent status. e-Dialog will be an independent operating unit of GSI. The company won't move its headquarters. And, though e-Dialog claims there won't be an impact to its technology because, unlike mergers of other ESPs, GSI does not have a proprietary email platform, both sides will need to work hard at integration.
So all looks good and rosy, as acquisitions do on the first day. But some questions remain for me:
- What does this deal mean for e-Dialog's non-retail clients? The company built a solid reputation in the travel and publishing industries, so what advantages does this acquisition bring them?
- What impact will there be on e-Dialog's characteristically nimble approach to solving clients' particular email issues through innovative technology solutions? And what of its analytics program?
- Will e-Dialog's small email business get lost in the behemoth GSI and suffer the fate of other independent ESPs that got swallowed up in the M&A craze of a couple years ago?
I give them a year to adjust and then, well, it'll be just about time for another Wave.