Consolidation Begins In Online Ad Market As Adknowledge Buys Super Rewards


Adknowledge hopes to open up a new chapter of the online advertising market with its purchase of Super Rewards, a deal it announced Wednesday.

No financial terms were released. However, the transaction appears to be many times larger than any of Adknowledge’s previous takeovers. The company has made five acquisitions in two years recently buying the media division of MIVA for $11.6 million.

The deal pairs a more tradition approach to online advertising – Adknowledge runs a network for placing display, or banner, ads and positions itself as an alternative to Google or Yahoo – with Super Rewards’ focus on virtual currencies.

“It’s a new way to think about advertising,’ says Adknowledge CEO Scott Lynn.

The combination of the two will likely create a formidable competitor and one that will be closely watched. Virtual currency is already a $600 million market in the U.S. and has been growing at a 600 percent pace, according to some estimates. “It is clearly not a fad,” says Lynn.

As the largest virtual currency company, Super Rewards, a division of KITN Media, has said it will generate about $100 million in revenue this year. Adknowledge will have revenue in excess of $250 million.

The company offers its currency to developers of online games and applications on social networks, such as Facebook and MySpace. Consumers earn it by signing up for advertised offers and then redeem it for virtual goods and services in the games they play.

The deal could indeed be a trendsetter. With virtual goods a new bright spot in the social advertising market, other firms will look at ways to respond and capitalize for themselves.

The could make Super Rewards competitors hot properties.