* Shares gain 66 pct in past six months

* Revenue declines over past three quarters

* Pressure seen mounting on major segments

Shares of ValueClick Inc (VCLK.O) have gained 66 percent in the past six months, but the online-advertising company has seen revenue declines over the past three quarters due to weakness at two of its major segments.

Although ValueClick has edged past Wall Street estimates for the last four quarters in a row, it has seen pressure mounting on its media segment -- which includes the display advertising, lead generation and email marketing businesses -- and the affiliate-marketing segment.

These segments accounted for nearly 65 percent of ValueClick's revenue in the second quarter.

Westlake Village, California-based ValueClick also continues to face competition from companies like Google Inc (GOOG.O) and Yahoo Inc (YHOO.O).

Seven analysts recommend a buy, two analysts advise a sell, while 11 remain cautious on the name with a hold.

So, is the contraction in ValueClick's prime segments reason enough for investors to opt out?

HURDLES AHEAD

I would expect shareholders to be concerned about some of the recent trends at the company and to be considering selling the stock, Citigroup analyst Mark Mahaney said.

Mahaney, who has a sell rating on the stock, expects increased competition in the display-advertising business, particularly from Google, in the second half.

Piper Jaffray analyst Gene Munster said, Business appears to have bottomed, but hurdles remain ahead.

If you kind of look around the space, there are some other companies that are better and are cheaper.

It is easier to make a case to own Yahoo than a company like ValueClick, said the analyst, who has an underperform rating on the stock.
Benchmark Co analyst Clayton Moran believes the stock is not worth buying right now due to the low quality of earnings, lack of brand value and potentially fleeting arbitrage activities.

Yet some analysts see the company as an attractive and promising proposition.

MOMENTUM TO CONTINUE

Trading at five times EBITDA and seven times free cash flow, (ValueClick) is very attractive, Merriman Curhan Ford analyst Richard Fetyko said.

It's not growing right now - but the whole market has shrunk and they are not alone.

Competition from players like Yahoo and Google has been there for a while, but hasn't really panned out yet, said Fetyko, who rates ValueClick buy.

There was always a threat of Google getting its act together and starting to make progress on its ad network side, the analyst said.

But the Google threat has been talked about for three years and we haven't seen much impact of Google on this marketplace, he added.

Collins Stewart analyst Sandeep Aggarwal said except for the lead-generation segment, all other divisions were very strong in the second quarter, though there was some weakness in the affiliate-marketing segment.

We expect the strong momentum ValueClick has built in its U.S. display ad, comparison shopping and technology segments to continue in the second half, he added. Aggarwal has a buy tag on the shares. (Editing by Vinu Pilakkott)

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