Anne Holland

Return Path Acquires NetCreations UPDATED

June 29th, 2004

Just hung up from long phone interviews with Michael Mayor, president of the new NetCreations division of Return Path, and Return Path CEO Matt Blumberg about the NetCreations acquisition.

Some details:

1. Return Path had been talking about buying NetCreations for about a year before the company went on the market.

The company, which built its business first on eCOA services, then added deliverability and email-marketing consulting services when it bought Assurance Systems and Gas Pedal Consulting in 2003, wanted NetCreations for its list management, customer acquisition and research divisions.

Why an acquisition and not a spin-off and return to independent status for NetCreations? Mayor said he and his management team considered several possibilities but said the sale to Return Path was “the best one for the company. It keeps NetCreations intact and helps us provide more services for our clients and partners.”

2. Return Path paid an undisclosed amount of cash for NetCreations, using its own money and venture capital provided from companies that have invested in email concerns before.

3. Mayor and Blumberg said no layoffs are planned as the two companies consolidate operations, although some back-end operations such as accounting and HR could be affected. Instead, they said, both are hiring because they anticipate attracting more business to the expanded firm.

4. About the only thing missing now under Return Path’s umbrella now is actual list hosting. Blumberg said the company’s not shopping for an email broadcaster right now.

“The email delivery space is very crowded and very well covered by the companies we do a lot of business with.” Blumberg said.

5. Cross-promotion and data integration are two of the top items on the to-do list. Blumberg said

“We’re looking at a lot of innovation,” Blumberg said. “We’re getting ideas from our customers about getting into new email data-oriented services, and we have a lot of ideas about different things customers have asked us for. We have a pretty good idea of the need out there for helping companies build their lists and enhance their lists.”

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