E-Commerce News: Call Centers: ATG Nabs eStara in $48.3 Million Deal

Demand for click-to-call functionality is rapidly growing, said ATG Chief Marketing Officer Cliff Conneighton. He pointed to eStara's revenues, which grew 64 percent year over year to $7.4 million in 2005. Revenue for the first six months of 2006 was $6.5 million.

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ATG (Nasdaq: ARTG) has announced that it will acquire e-commerce best-of-breed vendor eStara in a US$48.3 million cash-and-stock transaction that will increase ATG's market share and bring new niche functionality under its umbrella.

eStara specializes in click-to-call technology -- an online e-commerce tool that lets a customer care rep contact a buyer online to see if the buyer has any questions, ATG Chief Marketing Officer Cliff Conneighton told CRM Buyer.

One of the ways retailers typically use the technology is to rescue a sale. For instance, if a potential buyer of a high-ticket item appears to become confused or seems to be dithering over whether to purchase the item, a talk icon appears on the buyer's desktop with a message inviting questions.

"It can be surprisingly beneficial to talk to an agent at this point," Conneighton said, noting that eStara's data shows retailers can increase conversion rates by 50 percent.

The technology can also reduce Web site and shopping cart abandonment rates by 10 to 45 percent, and reduce call handling time by up to 60 seconds, according to ATG.

Sale Opportunities

eStara's customer base, which consists of larger online retailers, is relatively similar to ATG's, Conneighton added. The company expects to realize cross-sell and upsell opportunities as result.

eStara customers will not be required to implement ATG, however. The company will maintain the application as a stand-alone product. ATG will continue to invest in the company's road map as well. ATG customers, for their part, will have access to eStara as a stand alone application initially, and then later as an add-on to the ATG suite.

An on-demand application, eStara can be used by licensed software users as well, Conneighton said.

eStara also markets a chat product that can be integrated with its click-to-call functionality. ATG will sell the eStara chat offering, as well as its own.

A Growing Space

Conneighton said he has not sized the click-to-call subsector, nor found independent analysis that has done so. He maintained that demand for the functionality is rapidly growing, however, and pointed to eStara's revenue, which grew 64 percent year over year to $7.4 million in 2005. Revenue for the first six months of 2006 was $6.5 million.

Under the terms of the agreement, ATG will acquire all of the outstanding common stock, preferred stock, vested and unvested stock options of eStara for approximately 15.3 million shares of ATG common stock, $2 million in cash, and up to an additional $6 million in earn-out potential.