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Online Advertiser Buying Spree Continues

WPP Group PLC, the world's second-largest advertising and marketing conglomerate, is buying the online advertising company 24/7 Real Media Inc. for $649 million, the companies announced Thursday.

It was the latest deal in the booming online advertising business as traditional marketing firms seek to quickly build up their profiles in Internet advertising, which is growing far faster than other kinds of media such as television, radio and newspapers.

WPP, which is based in London, is paying $11.75 per share for 24/7 Real Media, a 30 percent premium over the company's average closing price over the past two months.

In addition to $637 million that 24/7's shareholders are receiving, unvested stock and options are valued at $49 million and net cash is expected to be about $37 million at closing, to value the company at $649 million, WPP said.

24/7 has been the center of takeover speculation since Internet search leader Google Inc. agreed in mid-April to buy online advertising company DoubleClick Inc. for $3.1 billion.

Also, Yahoo Inc. struck a deal to buy the privately held online ad exchange Right Media Inc. for $680 million last month. Microsoft Corp. was also seen as a possible buyer for 24/7.

Shares of New York-based 24/7 rose 42 cents, or 3.7 percent, to $11.68 in early trading, while shares of WPP rose 24 cents to $75.27.

Advertising agencies have also been swooping in to pick up established players in online advertising, seeing it as a quicker way to establish a presence in the area than starting their own operations from scratch.

In January another major advertising conglomerate, the Paris-based company Publicis Groupe, purchased the online advertising company Digitas.

Other companies in the online advertising sector have also been receiving attention following Google's deal for DoubleClick, which instantly gave the search company a major presence in display advertising online. ValueClick Inc. and aQuantive Inc. have also been seen as possible acquisition targets.

WPP is a major advertising services company and includes several major agencies, including Grey Worldwide, JWT, Ogilvy & Mather and Young & Rubicam.

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