It's a tired old phrase in mergers and acquisitions: One plus one equals three. In other words, combining two companies creates inherent synergies, leading to increased revenue opportunities and lower cost structures.
In theory, anything can look good. But integrating two different organizations is never easy and often fraught with risk.
As for aQuantive
So far, all three divisions are growing rapidly. In the first quarter, revenues increased 187% to $65 million and net income increased 55% to $6.4 million.
This is not to say that aQuantive has grown mostly through mergers and acquisitions. In fact, 61% of last quarter's revenue growth was organic.
However, its acquisitions allow aQuantive to offer clients a full range of services. Online marketing is not just about building a good website and having an effective paid-search program. Rather, it's an integrative approach that looks at how traditional and online marketing work together. Offering a broad set of solutions it gives aQuantive an edge during the request-for-proposal process, in which it vies for new business.
In fact, the company has upped its guidance. For the second quarter, aQuantive expects revenues of $65 million to $70 million and earnings per share at $0.08 to $0.10. For the year, the company forecasts revenues of $265 million to $275 million and earnings per share at $0.36 to $0.40.
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Fool contributor Tom Taulli does not own shares mentioned in this article.