24/7 Media posts loss; Microsoft still interested?

24/7 Real Media (NASDAQ: TFSM), a key player in the burgeoning Internet advertising industry, announced yesterday that they have retained the services of Lehman Brothers (NYSE: LEH) to assist them in "assessing strategic alternatives." I read this to mean, "Help us figure out how much we can get for for the company." Last week, rumor had Microsoft (NASDAQ: MSFT) offering as much as $1 billion.

Current performance, as measured by yesterday's quarterly earning report, suggests that 24/7 could use a boost if it is to retain and grow its position in the market. It continues to chase competitors such as ValueClick (NASDAQ: VCLK), which reported revenue three times that of 24/7 and an EPS of $0.18. With Google's (NASDAQ: GOOG) acquisition of DoubleClick, coming up with table stakes to remain in the game is going to require deep pockets.

At the moment, 24/7 is playing with chump change. Yesterday, they reported a 1st quarter loss of $0.1 million. This was, however, a considerable improvement over the $7.5 million they lost in the same quarter of 2006. Revenue was up 34% over last year, to $57.7 million. Half of this revenue came from their Search Solutions segment.

Google purchased DoubleClick for $3.1 billion, estimated at 20 times its earnings of $150 million. 24/7's revised guidance estimates their 2007 revenues at $265-275 million.

The question here seems to be, can 24/7 get DoubleClick-type money? In the current exuberant market for e-advertising, I wouldn't be surprised, especially if other suitors enter the bidding.