Online Extra: Espotting Media

Britain. Rank: 4. Sales: ¬36.4 million

A year-and-a-half ago, everything looked rosy for London-based Internet startup Espotting Media. Founded in 2000, it helped introduce Europe to the sizzling new online advertising technique known as paid placement, where words entered into search engines such as Google (GOOG ) and Yahoo! (YHOO ) return not just free links but also sometimes-subtle advertisements from companies that pay to have their promotions tied to specific words. Espotting had a tiger by the tail, and its revenues soared from less than €80,000 in 2001 to €41 million in 2003.

Alas for Espotting, it wasn't the only company to spot the trend. Larger U.S. rival Overture Services also set up shop in Europe at the same time, grabbing important accounts such as Microsoft's (MSFT ) MSN and Deutsche Telekom's (DT ) T-Online. And the gorilla of the business, Google, took a cakewalk across Europe with its marquee brand name and multilingual search capabilities. When Yahoo! gobbled up Overture in July 2003 for $1.6 billion, Espotting suddenly looked like the odd man out.

EMPLOYMENT ENGINE.

  The company's ambitious founders weren't willing to see their dream go down in flames. So they agreed in the summer of 2003 to merge with Fort Myers (Fla.)-based FindWhat.com (FWHT ), in a deal valued at $162 million when it closed July 1, 2004. "The market now recognizes us as the only remaining independent player not affiliated with a search engine," says Seb Bishop, a co-founder of Espotting who now sits on FindWhat's board.

Since the merger was announced, Espotting's fortunes have continued to improve. It booked revenues of €89 million in the year ended Mar. 31, up 145%, and now counts 23,000 advertising clients, up from 20,000 a year ago. With 220 employees, vs. 140 a year earlier, it's still an employment engine in Europe. It may be controlled by managers across the Atlantic, but Espotting is still a bona fide European success story.

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