Web hosting services provider, Hostworks (ASX:HWG), has signed a three-year $2 million contract to deliver online advertisements from more than 100 high traffic websites for an undisclosed client, described as a major company.

Using Hostworks' new ad-serving managed service, the client expects to deliver more than half a billion ads per month, although the contract allows for as much as 500% growth in this volume. This growth potential aligns with market predictions for continued strong growth in online ad volumes, according to Hostworks.

Hostworks' new ad-serving managed service is based on the Accipiter AdManager online ad management solution. This contract marks the first Australian company to use Accipter ad-serving ASP delivered service. Hostworks has built up expertise with the Accipter system, which it has managed for its client ninemsn since 2001. Hostworks also provides an ad serving solution for RealEstate.com.au.

Hostworks managing director Marty Gauvin said the ad-serving ASP service leveraged Hostworks' leading infrastructure to create a new revenue stream. "Hostworks has established a leadership position as the first choice provider of managed critical applications in the Asia-Pacific region," he said.

Hostworks director of sales and marketing Klaus Bartosch said, "Our vision is to build an integrated online marketing platform that will become the logical choice for companies planning major TV ad campaigns and who realise that integration with digital media solutions is now a critical requirement of these campaigns, and who understand that retaining these competencies in-house is just not practical".

Revenue figures recorded by the Audit Bureau of Verification Services report that Australian advertisers spent 64% more online in 2004 than in the previous year, making it the nation's fastest-growing medium. The online advertising market grew more than six times faster than the overall ad market last year to hit $388 million.

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