STREET TALK: Silicon Alley Comes of Age
Few industries provoke such a cacophony of cheers and jeers as the Internet. Brown Brothers Harriman & Co. tracks merger and acquisition activity in Silicon Alley, the hotbed of New York City’s online community, and publishes the results on a semi-annual basis in its Silicon Alley Yearbook. One of the most popular features in the Yearbook is the latest ranking of the Alley’s most active buyers.
So who’s making the most waves with respect to advertising and marketing services? The results may surprise you. As shown above, the answer is Internet services company Rare Medium Group. In fact, interactive ad agencies account for more than 70% of the marketing services acquisitions included in BBH&Co.’s “Most Active Buyers” list.
Rare Medium is typical of many Silicon Alley “dot coms” in that the company has an operating history of less than a year-and-a-half. While many Internet industry outsiders dismiss the long-term viability of interactive agencies’ acquisition targets, one need only counter with West Coast-based USWeb’s recent $300 million acquisition of blue-chip consulting firm Mitchell Madison, a McKinsey & Co. spin-off.
As Silicon Alley comes of age, it’s likely that interactive agencies will increasingly compete for many of the deals that otherwise would have gone to the traditional agency holding companies.
