No doubt, internet advertising is red hot. Unfortunately, in the case of last week's IPO of Internet Brands (NASDAQ: INET), things were mostly cold. The price range on the offering was $10-$12, but the company was only able to price its deal at $8.
Internet Brands develops and acquires consumer websites, such as in the categories of automotive, travel and home improvement. It has about 45 principal websites, which include properties like CarsDirect.com, FlyerTalk.com, and DoItYourself.com. The network attracted about 26.7 million unique visitors in September.
So, what's the problem? First of all, there is not much synergy among its different categories. After all, can you really cross-sell among automotive and home improvement sites?
Interestingly enough, Internet Brands also recently purchased Jelsoft Enterprises Limited, which develops the vBulletin board platform. Why? I'm really not sure.
What's more, I think it can be tough to manage a large number of diverse sites. Basically, this is something that is better for larger organizations, such as Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO), and Microsoft (NASDAQ: MSFT).
Finally, revenues for the first nine months of 2007 actually fell from $65.2 million to $64.9 million. There was also a net loss of $2.4 million.
The lead underwriters on the deal included Thomas Weisel Partners and Jefferies.
You can find the prospectus at the SEC website. Also, if you want to find other recent information on IPOs, then visit DealProfiles.com.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
11-19-2007 @ 11:52PM
Alex Esguerra said...
Not only that when I blog about Internet Brands being an IPO yesterday at bloglines, I mentioned that it was encompassing lending in the auto and home mortgage industry. Instead of using the branding with the big wigs, my suggestion was perhaps to look into operating capital - venture capital for small and micro brick and mortar internet store retailers as part ot it's company's vision and focus.
1-24-2008 @ 8:58AM
richard said...
we are legit company,we deal with electronics