May 9 (Bloomberg) -- 24/7 Real Media Inc., an Internet advertising company, hired Lehman Brothers as an adviser as it considers selling itself. The shares rose in extended trading.

Lehman will help assess ``strategic alternatives,'' New York-based 24/7 Real Media said today in a statement. The stock gained 20 percent on May 1 after the New York Post reported Microsoft Corp. is weighing a $1 billion bid for the company.

The news came as 24/7, which sells ads for smaller Web sites and offers software and services that let advertisers target and measure ad campaigns, reported first-quarter profit that missed analysts' estimates.

``They didn't announce that anyone was buying them,'' said Aaron Kessler, a Piper Jaffray & Co. analyst in East Palo Alto, California. ``Their earnings per share were a little below what we expected.'' He rates the stock ``outperform'' and doesn't own it.

The shares rose 45 cents, or 4.1 percent, to $11.55 in extended Nasdaq Stock Market trading. They gained 40 cents to $11.10 in regular hours and have advanced 23 percent this year.

24/7 narrowed its first-quarter net loss to $56,000, or breakeven per share, from a loss of $7.52 million, or 16 cents, a year earlier. Sales rose 34 percent to $57.7 million.

Excluding some costs, profit 8 cents a share missed the 10- cent average estimate of nine analysts surveyed by Bloomberg. Sales missed their projection of $58.7 million.

Consolidation

24/7's decision comes as the $16 billion U.S. Web advertising market consolidates.

On April 13, Google Inc. agreed to pay $3.1 billion for DoubleClick Inc., which competes with 24/7's technology business. The deal sparked speculation that smaller companies including Seattle-based AQuantive Inc., ValueClick Inc. of Westlake Village, California, and 24/7 may be bought.

Microsoft has been seen as a likely buyer because it has trails Google, owner of the most-used search engine, in online advertising. Redmond, Washington-based Microsoft announced plans today to buy a 4 percent stake in CareerBuilder.com, an online help-wanted site.

Microsoft has also held partnership talks with Yahoo! Inc. to boost their share of the Web search and advertising market, people briefed on the discussions said on May 5.

To contact the reporter on this story: Tim Mullaney in New York at tmullaney1@bloomberg.net

Last Updated: May 9, 2007 18:33 EDT