AdOne, PowerAdz To Merge

By: Wayne Robins

It’s as if Hertz teamed up with Avis. Or is it more like peanut butter and jelly?

AdOne LLC and PowerAdz.com, who both have provided online classifieds and Web site publishing services for newspapers, will announce their merger Thursday morning. The deal is expected to close at the end of the month, with the name of the new company still unannounced.

In some ways complementary, in some ways rivals, the new company will serve more than 1,600 daily and weekly newspapers in all 50 states. Brendan Burns, founder and CEO of AdOne, and Mark Chudzicki, founder, president, and CEO of PowerAdz, will be co-CEO’s.

“We have not really been dead-set competitors; we’re complementary businesses,” Burns said in a joint phone interview late Wednesday with E&P. “One of the things Mark and I got excited about when we put our respective products and customers on paper is that there is not a whole lot of overlap.”

AdOne’s strength has been in building an online classifieds business — mostly with large newspapers. It has the financial backing of nearly a dozen media companies: Advance Publications, Belo, Donrey, E.W. Scripps, Hearst, the Journal Register Co., Lee Enterprises, Media General, Media News Group, Morris Communications, and Pulitzer Inc.

PowerAdz has worked mostly with small and midsize newspapers, but brings to the table hundreds of affiliates, including some newspapers that overlap with AdOne’s corporate owners, such as Belo’s Dallas Morning News and the Journal Register newspapers. Other affiliates include the New York Post, Pittsburgh Post-Gazette, Milwaukee Journal-Sentinel, Orange County Register, Omaha World Herald, and the The Record based in Bergen County, New Jersey. For these large papers, PowerAdz has provided some online classified technology. For the small and midsize papers that make up the bulk of its clientele, PowerAdz has provided full-service Web-publishing systems.

“The primary focus of PowerAdz over the last two years has been on editorial and retail marketing,” Chudzicki said. “The focus of AdOne has been the classified side of the house.”

“We’re in position to be a one-stop shop,” Burns added.

Despite what the CEO’s say is a natural fit, it is obvious that there will be some loss of jobs because of duplication. “We don’t know the numbers yet. Finance and administration are obvious areas where we have direct overlap,” Burns said.

In the worst media economy in memory, the two CEO’s remain optimistic. “We are perceived as a high-quality but competitively priced product in the market, and our products help local publishers save money,” Chudzicki said. “We’re not going to sit here and predict we’re going to blow all our revenue numbers out, but we think we’re well positioned to operate in a difficult economy.”

The main company headquarters will be in Troy, N.Y., near Albany, home of PowerAdz. An office in New York City, where AdOne was located, will also be maintained.

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