CMGI to Combine Web Ad Businesses

Internet venture fund CMGI Inc., in a move to take on leading Web ad agency DoubleClick Inc., said its Engage Technologies Inc. unit will acquire two CMGI-controlled businesses, Adsmart and Flycast Communications Corp., for about $2.46 billion in stock. In response, Engage shares soared $20.56, or 27%, to close at $97.56 on Nasdaq. Engage, which develops profiles of shoppers’ buying habits, would issue about 32 million shares to acquire closely held Adsmart, an ad network, and Flycast, which tracks response rates to ads. The transaction would raise CMGI’s stake in Engage to 87% from 80%. CMGI, based in Andover, Mass., fell $1.81 to close at $120.56 on Nasdaq.