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aQuantive Q2 2006 Earnings Conference Call Transcript (AQNT)

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2006-08-01 19:17:59.0

Tags: aQuantive Inc., Margin, Call Transcript, Earnings, Asset Management, Investment, Operational Planning, Business Operations, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions)Your first question comes from the line of Richard Ingrassia - Roth Capital Partners.

Richard Ingrassia - Roth Capital Partners

Thanks, good afternoon everybody.

Brian McAndrews

Hi Rich.

Richard Ingrassia - Roth Capital Partners

Brian can you say a little more about the financial impact of the business investments you plan to make in the second half? Will you be using cash, drawing down cash to make investments or will we see it more on a margin impact?

Wayne Wisehart

Richard let me take a shot at that first. Actually, most of these investments internally will be the addition of additional people, development folks and those would be generally just paid from the operations of the business. While I expect there would be some impact to the margin, as you can tell, these are principally in the Atlas division.

There probably will be some impact to the margin which in this quarters as you know, is 43%, but I still expect for the rest of the year to deliver a very healthy margin for the Atlas business, probably something in the lower 40s.

Richard Ingrassia - Roth Capital Partners

Okay, and then related to the cash then Wayne in general are you looking to make the kind of acquisitions you made with Amnesia as in you’re looking for creative assets as oppose to technology assets?

Brian McAndrews

Rich, we’re looking for both, I mean depending on what the opportunities are. I think right now we do see a real opportunity in growing geographically for Avenue A ¦ Razorfish business. So, we have invested in that with DNA last year and Amnesia this year and we expect that to continue. On the capabilities technology front you know, we always are looking to enhance capabilities for our clients. I think we feel the bulk of that will be done by our own internal investments and that is part of what Wayne was just referring to in what we are investing. But if we do see opportunities we certainly, as we have in the past, we’ll also make purchases if it makes sense as a way of accelerating capabilities for our clients.

Richard Ingrassia - Roth Capital Partners

Part of the question is that there seems to be an awful lot of opportunity in the CPG segment going forward this year and would you identify that as a vertical where you can build your resources?

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