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Earnings: TechTarget 's Losses Narrow; Revenues Up
The online and events tech trade company TechTarget (NSDQ: TTGT) announced its Q30 earnings today, and revenues increased by 8 percent to $25.2 million, compared to $23.3 million for year-ago quarter. Online revenues increased by 27 percent to $18.6 million compared to $14.7 million Q307 and represented 74 percent of total revenues, something it is happy about. Net loss for the quarter was $314,000 compared to net income of $1.8 million for the year-ago quarter. The company says it has a strong balance sheet and enough cash flow to tide it through the macro economic downturn.
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Analysts Disappointed By Yahoo's Q3, Low Expectations For The Future
Yahoo's struggles are nothing new, and yesterday's Q3 reconfirmed that the tough times will only continue. Aside from plans to lay off 10 percent of its workforce, Yahoo reported anemic 1 percent growth in revenue—$1.786 billion—and a 19.6 drop in net income to $153 million. Also, affiliate revs continued their series of quarterly declines, dropping 10 percent over last year; and while O&O display was up 3 percent, it represented a significant slowdown in growth. As for how some of the analysts who follow Yahoo saw it, most continue to believe that the company's stock, which was trading around $12.60—less than a third of where it was back in June when Microsoft (NSDQ: MSFT) was trying to acquire it—is still worth holding. But most remain skeptical about a turnaround before the end of 2009.
-- Bernstein finds positives, but not 'til '09: Despite the poor performance this past quarter, Jeffrey Lindsay, a Bernstein Research senior analyst, feels that the cost-savings from the roughly 1,500 layoffs could start to turn things around at Yahoo (NSDQ: YHOO). "If management follows through with its promise to reduce headcount by 10 percent by the end of 2008, we could see a possible 300 bps improvement in margins by the end of 2009." But for right now, Bernstein is lowering its revenue forecast for Yahoo and reducing its price target from $18 to $16. Lindsay's full report is here. Other analysts' views after the jump.
-- UBS' six reasons to like Yahoo: In addition to the $400 million in expected cost savings, UBS internet analyst Ben Schachter cities five other factors that make Yahoo's stock attractive: Yahoo's sites are still heavily visited by users; the display strategy, if not the execution, is solid—especially considering the promises of the ad targeting and delivery platform APT; the Microsoft acquisition remains a possibility; other potential partnerships between rivals like Google (NSDQ: GOOG) and AOL (NYSE: TWX) could give the company a boost; and lastly, Yahoo's cash and short-term investments, plus its share of its Asian investments, are worth approximately $7 per share.
-- JP Morgan's dubious: Yahoo's plan to rein in costs sounds good, but JP Morgan internet analyst Imran Khan doesn't sound convinced that the company will get this right. "The company needs to be careful that cost containment does not slow investment in its core platform as we think this could lead to further market share and relevancy loss in the internet advertising space." JP Morgan also believes that Yahoo is losing display market share to niche sites, suggesting that it aggressively develops its categories to combat audience fragmentation. Lastly, the analyst doubts that Yahoo's search pact with Google will pass regulatory muster.
-- Needham remains cautious: Given the challenging environment Yahoo finds itself in, Mark May, Needham's internet analyst, also doesn't think the cost containment measures will amount to much, at least in the near term. Needham thinks the 2009 estimates for Yahoo are too optimistic and the analyst is lowering their expectations below consensus forecasts. They will maintain a cautious hold rating on Yahoo's stock. Needham's report is here (PDF).
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TheStreet.com: CEO Clarke: Continued Focus On Acquisitions; Ad Market Holds Up
How did TheStreet.com (NSDQ: TSCM) manage to report a pretty solid quarter, in light of ad weakness and the market downdraft? CEO Tom Clarke chalked it up to the company's efforts at diversifying its network, reducing its reliance on financial advertisers, expanding its subscription services (see: Nails on the Numbers, a stock options newsletter written by Lenny Dykstra) and growing its other services (Promotions.com). Going forward, expect more subscription newsletters, an investment into long-form video and a continued focus on acquisitions (prudent, of course). A couple of other stats from the intro:
-- Ad Market: How did advertising hold up as it did? Clarke: "I think we said earlier in the quarter that we had not seen weakness in the categories that others have seen… the diversification that we've created around the category of money is really important when advertisers are looking at it. Non financial advertisers really want to go in front of the demos we have." Outlook: "As we look out into the third quarter, we still think that the non-financial category will be strong for us." He also noted the benefit of the Promotions.com deal in enticing advertisers. As for the financial advertisers, says CFO Eric Ashman: "We still feel very good about the financial advertisers on our site." But growth is about the non-financials, and you can't call a bottom.
-- Deals: What is driving the company's decision making on deals? Clarke: "Valuations. Public valuations are cheaper than private valuations… we've got things in our pipeline, but haven't pulled the trigger due to valuation concerns."
More after the jump.
-- TheStreet Ad Net?: An analyst asks whether TheStreet.com might get into the vertical ad network game (The question feels very Q407). Clarke's answer was unclear, saying it was something "In the front of our thought process" and that they already rep ads for Dividend.com and Bankaholic. Then he said the company was not comfortable doing it en masse, because TheStreet wants to focus on selling quality inventory: "You're not going to see us add 20-30 (publishers) in any one quarter." Then he added that that may change and that it will happen over time. Basically, it sounds like an ad network could emerge over time into a major business, but that the company has no plans to fling open the gates to all comers that want access to their salesforce.
-- Video Strategy: Seeing more interest among audiences in long-form content. Because the company has video production infrastructure in place, the company has room to expand offerings without a huge increase in costs. More: Advertisers want opportunities to get their ads in front of users longer. It's also possible that the company will experiment with a subscription model for video.
-- Mainstreet: Clarke hasn't changed his tune on the site, continuing to talk it up as key to the company's long-term strategy and growth: "We love the content of Mainstreet." Content-wise, it's open as to what can go on it, unlike TheStreet.com, which is more limited towards investor news. No traffic numbers given out, but Clarke says it continues to grow.
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Earnings: TheStreet.com Q2 Beats Top Line Estimates; Net Income In line
Considering all the natural challenges TheStreet.com (NSDQ: TSCM) is facing, this looks like a solid quarter… Q2 revenue came in at $19.7 million, 32 percent over last year's $14.9 million, and nicely ahead of the $19.3 million analysts were expecting. Note, however, that $3 million came from its acquired Promotions.com unit, without which revenue growth would have been a still-respectable 12 percent. Net income of $2.3 million ($.07 per share) was in line with estimates. Ad revenue for the quarter was up 16 percent to $6.4 million. Paid services revenue was up 9 percent to $10.3 million. The company also continues to diversify away from financial advertisers. Non-financial advertising revenue was up 34 percent, accounting for 45 percent of the total.
There's no outlook in the release, nor any discussion about the economy and its effect on advertising, so we'll be listening for that on the call. We'll also see if the company says anything about Mainstreet.com, which CEO Tom Clarke has talked up highly on past calls, but which recently had a shakeup.
One other note: The company said yesterday in an SEC filing that it had extended the contract of founder and key personality Jim Cramer by one year.
Release | Webcast (11:00 AM ET)
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Earnings: TheStreet.com Q2 Beats Top Line Estimates; Net Income In line
Considering all the natural challenges TheStreet.com (NSDQ: TSCM) is facing, this looks like a solid quarter??? Q2 revenue came in at $19.7 million, 32 percent over last year's $14.9 million, and nicely ahead of the $19.3 million analysts were expecting. Note, however, that $3 million came from its acquired Promotions.com unit, without which, revenue growth would have been a still respectable 12 percent. Net income of $2.3 million ($.07 per share) was in line with estimates. Ad revenue for the quarter was up 16 percent to $6.4 million. Paid services revenue was up 9 percent to $10.3 million. The company also continues to diversify away from financial advertisers. Non-financial advertising revenue was up 34 percent to, and currently makes up 45 percent of the total.
There's no outlook in the release, nor any discussion about the economy and its effect on advertising, so we'll be listening for that on the call. We'll also see if the company says anything about Mainstreet.com, which CEO Tom Clarke has talked up highly on past calls, but which recently had a shakeup.
One other note: The company noted yesterday in an SEC filing that it had extended the contract of founder and key personality Jim Cramer by one year.
Release | Webcast (11:00 AM ET)
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Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
Financial Site Bankrate Lowers Outlook On Weak Display Ad Market
Financial site Bankrate (NSDQ: RATE) had been holding up admirably in the face of the weak mortgage market, as it consistently turned in strong results in recent quarters. In the past month or so, investors obviously lost confidence, sending its shares down over 35 percent, to around its 52-week low. And this morning the company finally acknowledged that the weak economy would take its toll. Though it says the cost-per-click, lead-gen business is healthy, it sees softness at its large financial advertisers. Bankrate now expects revenue for 2008 between $164-$169 million, down from a range of $167-$172 million. For the just-ended quarter, Bankrate says revenue came to just above $40 million, compared to estimates of $41.2 million. The good news: even at the lowered range, revenue will still be up over 70 percent for the year. Release.
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10-Q Watch: Mediabistro's Q108 Revenues: $2.2 Million
We have previously reported on Jupitermedia's (NSDQ: JUPM) Q108 revenues, as well as its subsidiary Mediabistro's full year 2007 revenues. Now in its latest quarterly 10-Q, filed yesterday with SEC, some data point on MB's latest revenues: it had $2.2 million in revenues for Q108; it added $269K to advertising, promotion and selling expense; and added $311K to general and administrative costs for the company. All of this was partially offset by reduction in advertising revenues due to a decline in advertising spending by technology companies (for the online media division of JUPM).
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Earnings: Jupitermedia Misses on Revenues; Losses Increase
Jupitermedia (NSDQ: JUPM), the images and online media company, has reported its Q108 earnings, and revenues for the quarter were down slightly, to $34.5 million, compared to revenues of $34.8 million for the year ago quarter. The net losses increased to about $1.1 million, from losses of about $728K in the year-ago quarter. Its revenues on the online media side (which includes Mediabistro now) increased to $8.4 million for the quarter, compared to $6.85 million in the year-ago quarter. Revenues for its images business decreased to $26.14 million, compared to $27.9 million in the year-ago quarter. More details in release here.
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Earnings: TechTarget's Q1:Small Losses; Revenues Up 30 Percent
TechTarget (NSDQ: TTGT), the B2B tech media company, has reported its Q108 earnings numbers, and total revenues increased by 30 percent to $23.9 million, compared to $18.3 million for the year-ago quarter. Online revenues increased by 38 percent to $18.9 million and represented 79 percent of total revenues, with the rest coming from events and other areas. The company was in a net loss this quarter, of $112,000 compared to net income of $317,000 for the year-ago quarter. The decrease was due to "increases in stock-based compensation expense and the amortization of intangible assets expense," the company said. In Q208, the company expects revenues to be within the range of $30.4 million to $31.6 million and adjusted EBITDA to be within the range of $8.6 million to $9.4 million. More details in release.
Despite Being Rebuffed By TNS, WPP Continues To Hold On; Higher Offer Expected
Although WPP Group's $1.9 billion offer to acquire audience researcher Taylor Nelson Sofres was rejected over the the weekend, the UK ad holding firm is still pressing the TNS' board for more talks, the Guardian reported. Sir Martin Sorrell, WPP's CEO, made the bid for TNS shortly after the researcher announce plans to merge with German audience measurement company GfK. The deal with GfK is valued at €100 million ($154 million) and would create the globe's second-largest audience measurement firm behind Nielsen.
TNS said it rejected WPP's offer because it believed it was "not in shareholders' interests" and that the bid undervalued the company. WPP has not said whether it will come back with a higher offer. A WPP spokesman said that the company has asked the board to provide more more specifics on its decision, which Sorrell has characterized as "cavalier." In turn, TNS shot back, through a spokesman: "It doesn't take long to reject a derisory offer."
-- Reuters: Analysts seem to agree that WPP's move is merely "opportunistic," contending that the ad holding company was spurred to disrupt TNS' merger with GfK, as a larger company with a blocking shareholder would ultimately make it more difficult to buy. Therefore, analysts expect WPP to come back with a higher offer.
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ComScore: Defending The Google 'Miss'; Value Of Third-Party Data Debated
After taking a beating last night, comScore (NSDQ: SCOR) is out defending itself from the charge that its Google (NSDQ: GOOG) paid click numbers were inaccurate. In a post on the company's blog, analyst Andrew Lipsman makes some fair points: First off, he notes that data that comScore releases to the public each month only refers to Google search ads in the US, and not to international numbers, or to Adsense ads on partner sites. He's also right in noting that comScore hadn't attributed its projected decline to the economy (as some interpreted)—in fact back in February, it made a point of downplaying the meaning of its numbers, after a release caused Google stock to sink.
Here's the problem for comScore, and it goes back to the saying about a little bit of knowledge being a dangerous thing: Each month, it releases a little scrap of data for the hungry to fight over. And taken in a vacuum, without more information (international, Adsense, CPC movement, etc.) it's difficult to know what any of it means. So people misinterpret it, and that misinterpretation gets pegged, fairly or unfairly, to the company. So if it wants to get some promotional juice out of these releases—in order to bolster the company's paid business—it needs to do a better job of explaining what it's putting out.
-- Picking up the discussion, reliance on third party data is the topic of this weekend's Bernstein Media Blast. Analyst Michael Nathanson writes: "As we write this, Google is up in the pre-market by over 15% as fears of declining paid clicks were more-than assuaged by strong reported results. During the first quarter, Google's stock swooned on days when the third-party data provider comScore reported weakening Google paid click data. According to comScore's data, Google's paid click growth sharply declined from 12% in December to 0% in January and 3% in February. This calamitous situation caused many market participants to surmise that Google's best days where behind it. Why not? They saw the data."
"The unintentional game of "bait-and-switch" that just occurred with Google is unfortunately becoming an all-to familiar occurrence to media investors and sell-side analysts. As we see it, the increased need to get an edge on short-term company results has created a booming demand for 3rd party data providers. Companies like comScore, NPD, IRI, Nielsen Media, Smith Travel and Arbitron have generated increased revenues by selling their products to data-point hungry investment analysts."
Ultimately, the piece is not an indictment of comScore or anyone else, but of analysts who fail to acknowledge the limitations of the info. And it should be noted that after falling hard after hours last night, comScore has made up most of the loss, so at least for now, it doesn't look like there will be a long-term fallout from this event. After all, it's only one data point.
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comScore Shares Sink After Blowing Google Call
More on the "gotcha mongers" theme: So who was the big loser from this evening's Google (NSDQ: GOOG) report? It looks like comScore (NSDQ: SCOR). The traffic analysis firm had been banging the drum the loudest about a fierce slowdown in paid clicks. But as that didn't materialize—or at least not to the extent predicted—it makes the company's data look suspect. And now comScore shares are taking it on the chin, falling 8.4 percent after hours. It's not conclusive that the fall is directly attributable to Google, but there is no other obvious news to explain it. And some analysts, including Ben Schachter at UBS, specifically predicted that the report would put comScore to the test. So how will comScore's data be treated when it releases numbers for the coming months?
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10-K Watch: Business.com Founder Holds $9M Worth Shares in RHD
Late last month, R.H. Donnelly surprised everyone by announcing the sudden departure of Business.com CEO Jake Winebaum....the company had bought Business.com in July last year and quickly made Winebaum the lynchpin of its digital strategy as the new President of RHD's interactive unit (RHDi).
His departure is being attributed to his desire to "spend more time with family", though as we reported earlier this month, RHD CEO had a rather mixed picture. "We had a lot of ups into Jake, but one other thing that I'll remind you, Jake remains a very large shareholder in R.H. Donnelley. One part of the agreement was that Jake had to buy a significant amount of RHD shares which have a three-year lockup and that's obviously still in place."
Now, in RHD's 10-K annual report filed Friday with SEC, some details of his stake and continued involvement of sorts: "On August 23, 2007, Jacob Winebaum purchased from RHD 148,372 shares of RHD common stock for approximately $9.0 million...Winebaum has recently decided to terminate his employment with RHD to spend more time with his family, but will continue to serve as a strategic advisor to the Company and sit on RHD Interactive's advisory board." This means he's locked in for at least three years to work in advisory capacity and hold this stock.
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CMP No More: UBM Breaks Tech Media Firm Into Four Companies; UBM Not Interested in RBI Either
In a big move in the tech trade media space, United Business Media, the UK-headquartered media firm has broken out CMP into four separate companies. The company, which went through a bunch of layoffs and restructuring and then booted its CEO, has now decided to do away with the CMP brand name, and the four smaller companies are:
-- TechWeb, formerly CMP's Business Technology Group, will be led by CEO, Tony Uphoff (Uphoff was the former publisher of Hollywood Reporter, though only for nine months before John Kilcullen replaced him...Kilculen departure from THR/Nielsen was announced yesterday). Some of the brands that are going with this company are Light Reading, InformationWeek, TechNet and MSDN Magazines and others. The 2007 proforma revenues for TechWeb were $148 million.
-- Everything Channel, formerly CMP Channel, will be led by CEO Robert Faletra. Some of the brands in this company are CRN, VARBusiness and others. The 2007 proforma revenues for Everything Channel were $73 million.
-- TechInsights, formerly CMP's Electronics Group, will be led by CEO Paul Miller. Some of th brands in this company are: EE Times, Semiconductor Insights, TechOnline, Embedded Systems Conferences and Portelligent. The 2007 proforma revenues for TechInsights were $83 million.
-- Think Services, formerly CMP's Game, Dr. Dobb's and International Customer Management Group, will be led by CEO Philip Chapnick. The brands in this company include Game Developers Conference, Gamasutra.com, and Dr. Dobb's Journal. The 2007 proforma revenues for Think Services were $61 million.
CMP has done over 18 acquisitions worth about $225 million in the last three years, particularly events and business information products. With these four companies, the new businesses will share support functions and infrastructure, including finance, IT services, legal and global account and sales management. The central functions will become part of UBM's US infrastructure with Scott Mozarsky, currently CMP's CFO, taking the role of COO. More here in the release.
Meanwhile, UBM also announced its 2007 earnings, and net income fell to 108.8 million pounds ($216 million) from 141.9 million pounds a year earlier. Sales rose 8.5 percent to 801.6 million pounds. Also, UBM CEO David Levin has also ruled out bidding for Reed Business Information, telling Reuters: "We have a strategy built around integrated media so to pick up a block of orphaned print assets is not consistent with what we want to do."
Updated: Sam Whitmore in his e-mail newsletter on why this makes sense: "UBM also has improved the odds of selling its former CMP properties, if it were so inclined. For example, a buyer interested in TechWeb might not necessarily be interested in, say, CMP's assets in computer games. This sort of thing happened to CMP a few years ago: it bought Miller Freeman for its tech media assets, but it also wound up owning Guitar Player magazine."
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Earnings: TechTarget's Net Income Flat; Knowledgestorm Integration Cuts Expenses By Half
TechTarget (NSDQ: TTGT), the B2B tech media firm, reports its Q4 results today, and its revenues were up by 23 percent to $28.4 million compared to $23.1 million for the year-ago quarter. Online revenues increased by 23 percent to $19.0 million compared to $15.4 million for the year-ago quarter. Net income for the quarter was $2.8 million, unchanged from the prior year quarter.
Also, the company will be restating some filings as a result of overstatements of its provision for income taxes in 2007; the restatement results in increases in net income of $534,000 and $290,000 for the quarters ended June 30, 2007 and September 30, 2007, respectively.
On the Knowledgestorm acquisition that it did last year, it has reduced expenses on the business by about 50 percent, it said, which equates to an annual projected reduction of about $8 million. t also said it has integrated half of the company's staff...not clear: if the rest of them were laid off. More as we know more. More results in the release here.
Earnings: Bankrate Q4 Revs Up 22 Percent; Buys InsureMe.com And Fee Disclosure For $87.85 Million
Financial info site Bankrate (NSDQ: RATE), considered to be something of a key bellwether given its reliance on the mortgage market, reported Q4 revenues of $25.2 million, a 22 percent year-over-year increase from $20.7 million. Net income increased 5 percent to $4.1 million ($.21 per share) from $3.9 million ($.21 per share). It was a record quarter for the company, and it actually raised its outlook for the year, but the market is spooked by an earnings miss and this line from CEO Thomas Evans: "It was an unusual quarter in that we had two record months followed by a soft December, when several display advertisers canceled booked business in that month as a result of anxiety in the mortgage and financial sectors." The stock is down over 8 percent after hours, after falling by 5.6 percent during the day, for a total drop of nearly 14 percent???it appears news of the release leaked early, since the stock cratered in the final few minutes of the day.
In addition to reporting earnings, the company announced two acquisitions after the bell:
-- Insurance site InsureMe.com for up to $85 million including $20 million in potential earn-outs.
-- Fee Disclosure, a site all about mortgage fees, for $2.85 million.
Englewood, CO-based InsureMe has been around since 1993, while Fee Disclosure launched in 2005.
Earnings: XFML Q3 Revs Up 118 Percent on Growth and Acquisitions; Net Income Up
Xinhua Finance, the Chinese online financial media company, has announced Q3 revenue of $40.7 million, a 118 percent increase over last year's $18.7 million. Over $8 million of revenue growth came via acquisition in its broadcast business. Net income soared to $9 million, from $849K. Some highlights:
-- Revenue at its advertising group grew 99 percent to $22.5 million. Included in this is $9.5 million in print/online revenue (which it groups together), up 92 percent from last year.
-- Total broadcast revenue was $8.7 million, almost all of which came from acquisitions. Included in this is $3.3 million in mobile services associated with the consolidation of Beijing Mobile Interactive, acquired in June.
-- The company is forecasting Q4 revenue of $42-$47 million.
Release | Slides (.pdf) Webcast
Disclaimer: Our board member Larry Kramer is also on the board of XFM.
Earnings: DJ's Zannino Uses Likely Last Call To Outline Progress; Hybrid Online Model Still In Play
One sure sign that life is winding down for Dow Jones (NYSE: DJ) as a standalone public company: an uncharacteristically brief Q3 earnings call with very little q-and-a from analysts. (The pending acquisition by News Corp. (NYSE: NWS) probably also brings to an end the detailed reports we've been getting throughout the life of the Online Journal and other digital businesses.) Beyond the usual financials we've detailed here, the event was one of the last major chances for CEO Rich Zannino to defend his own efforts, and those of his team, to "transform" the company over the last 20 or so months. His tone was even but his words showed some frustration with DJ's portrayal as a company in need of saving. An excerpt:
"Our growth this year proves that we are no longer solely dependent on print advertising at the Journal to drive our total company growth. ... We are not the wounded and malnourished media dinosaur that many in the press have recently portrayed us to be. On the contrary, our financial, operating and journalistic performance over the past 20 months is proof that, today, we are a fast-growing, thriving and vibrant company, one positioned for a very bright future. ... News Corp. sought us out for these reasons."
Hybrid model under review: An analyst mentioning the suggestion that Rupert Murdoch will make WSJ.com free, asked for an explanation of the current hybrid strategy, the factors that made DJ conclude "this was the right strategy" so "we can contrast going forward." Zannino took the first stab, arguing that the WSJ Digital Network already gets high traffic from non-paying subs: "What Rupert Murdoch has said is that he wants to take a hard look at our online business model; that's what we've done consistently over the years. ... We have roughly 17 million uniques (visiting the WSJ Digital Network) ... we have roughly 1 million paid subs so you can see how much traffic we're getting from 'free' visitors on a monthly basis. ... Even when you strip out MarketWatch, the Online Journal in the third quarter had about 10 million unique visitors, again we have 1 million paying, so you can see people are taking advantage of the free features."
But Zannino left room for a shift:
"As we've looked at the model over the years ... we have felt that—for this moment in time—we've had the right model. Times change, things change and the online space is rapidly evolving ... people's consumption on the web is rapidly changing and evolving .. it's up to us to continue to evolve ourselves, to keep pace and stay ahead and continue to be the #1 business news and financial information source on the web. Our interests are totally aligned with News Corp.'s interest on that score. We're going to spend some time here digging even deeper perhaps than we have in the past into the model." That will be done with News Corp."
Gordon Crovitz, the senior executive most responsible for online over the past few years, added: "We've known with the Online Journal we've had the best business site and we think we've had the best business model for it. The opportunity and the challenge now is to be both the best and the largest. At 10 million uniques for the Online Journal ... we're on our way but we're not the biggest so is there a way to continue to expand our audience while maximizing the profitability? ... We think there are some interesting opportunities to do that." Crovitz emphasized that "outsider" need to be aware the model has been hybrid, that most unique visits even before MarketWatch went to open content.
The entire call is less than 30 minutes. You can listen here; the 8-minute q-and-a with the extended response on hybrid models is here. The full text of Zannino's prepared remarks has now been posted here.
Earnings: Online Subs Drive Informa H1 Profit Up 24 Percent; Looking For Acquisitions
UK-based business publishing giant Informa (LON:INF) posted 24 percent better profits of £116 million, on 10 percent better revenue of £533 million, for the first half of the year, helped by a number of online initiatives. Amongst the highlights…
-- Profit in the professional unit was up £4 million to £38 million, driven mainly by online subscriptions, in particular to the i-law.com online legal portal.
-- 95 percent of all subscription and license revenue is now digital. In the release, the company said it had invested digitally to ensure it could benefit form customization, speed and greater reach.
-- The company proudly trumpeted, in the release, it has "very little reliance on advertising revenues", accounting for just three percent. CEO David Gilbertson at Telegraph.co.uk: "We have tried to build a business that is more resilient to economic changes, by having a lot of paid-for content, little advertising and a diverse geographic base."
-- Revenue growth at market intelligence firm Datamonitor, which Informa bought in May for £504 million ($994 million), were up 62 percent and Informa said the acquisition further supports its move toward digital information as all of its products are delivered electronically. UBS analyst Polo Tang, in Telegraph.co.uk: "The Datamonitor acquisition appears to be exceeding expectations."
-- Ingrid adds: Further acquisitions. In a Guardian article, CEO Gilbertson is quoted saying Informa would continue to look for "bolt-on" and "in-fill" acquisitions. But it will not be bidding for the B2B assets of Emap, which has effectively put all its divisions—B2B publishing, consumer media and radio—up for sale in what analysts say could collectively go for around 2.5 billion pounds ($5 billion). Gilbertson: "We've just debt-financed half a billion pounds to buy Datamonitor and we're very focused on integrating that business and that's really where our attention will be." He added though if Emap were to shed certain assets (which could be some titles or conferences), the B2B division could look more attractive. "If there was a real atomisation of the Emap business that might fit with our bolt-on and in-fill plans."
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Earnings: Ziff Davis' Revenues Down 30 Percent
The troubled tech media firm Ziff Davis reported its Q2 numbers today, and the picture still doesn't look great, despite selling off its enterprise division recently. Revenues totaled $16.5 million for Q207, down $6.6 million or 29 percent from the prior year. Digital revenues increased 14 percent versus prior year. Revenues from its print publications, excluding the effect of closed publications, declined by 31 percent versus prior year.
It had net losses of $39.3 million for Q207, compared to $32.9 million loses in Q206. EBITDA from the company's digital businesses was relatively flat versus year ago, while EBITDA from the company's ongoing print publications declined $2.3 million versus the prior year quarter. Revenues for the Game Group were $5.5 million, reflecting a decrease of $3.2 million or 37 percent compared to the $8.7 million reported in the same period last year. Revenues for the Consumer/Small Business Group were $11.0 million, reflecting a decrease of $3.4 million or 24 percent compared to the $14.4 million reported in the same period last year.
This comes as the company is going to default on its debt payment, announced last week. More earnings details in release.
From its 10-Q filing, also filed earlier today, this warning based on its debt burden should come as no surprise: "The uncertainties described above raise substantial doubt about our ability to continue as a going concern, and to realize our assets and satisfy our liabilities in the normal course of business. No adjustments have been made to the accompanying financial statements related to this uncertainty." Also from the 10-Q, outgoing CEO Bob Callahan will be paid about $1.4 million in equal installments over the next year, while the newly appointed CEO Jason Young's salary is $600K per year, with $400K in bonus if the company reaches certain targets.
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Earnings: Acquisitions Spur Revenue Growth At Nielsen; Buzzmetrics: $47 Million; NetRatings: $328 Mi
The Nielsen Company (fka VNU) reported quarterly revenue growth of 15 percent over the year-ago period (pro forma), hitting $1.17 billion, although growth would have been significantly slower without a currency benefit. The company's acquisitions of Netratings, Buzzmetrics and Valcon led to a significant sales boost in all three of its business lines, Consumer Services (market research), Media (ratings) and Business Media (trade pubs, events). The moves have come at a time when media ratings agencies are coming under pressure to improve their accuracy and do a better job accounting for changing media consumption habits.
Operating income for Q2 was $100 million compared to pro forma operating income of $45 million in Q206. The Q207 results were negatively impacted by $36 million in restructuring costs and $9 million in Nielsen//NetRatings deal related costs and payments in connection with compensation agreements and recruiting expense for some corporate executives. Release.
Some figures on acquisition deal size from Nielsen's 10-Q, filed today: $47 million for the remaining chunk of Buzzmetrics and $328 million for NetRatings.
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Earnings: Answers.com's Q2 Revenues Up, Losses Narrow; Laying Off 12 Percent of Staff
Answers.com (Nasdaq: ANSW), the online reference site which is in the process of buying Dictionary.com parent for $100 million, has reported its Q2 numbers: Q2 revenues were $2.81 million, at the low end of original guidance, but up 86 percent compared to the same period in 2006. Net loss was $1.24 million, compared to $2.94 million in the year-ago quarter. Its user-gen site WikiAnswers contributed $177K in Q2, up over 50 percent from Q1, the company said.
Earlier this month the company disclosed that its traffic dropped about 28 percent in end of July, after Google changed its search algorithm...the site is heavily dependent on Google for search-related traffic, and this would also mean serious impacts on its revenues and stock price. The company is also laying off about 12 percent of its workforce, in an attempt "toward returning to Non-GAAP profitability in Q4 of this year." More info in release.
From the conference call: Also leaving, Jeff Cutler, company's Chief Revenue Officer for the past 2.5 years, the company announced.
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Earnings: TechTarget's Revenues Up; Profits Up Slightly
TechTarget (Nasdaq: TTGT), the tech media and events company, reported its first public results after completing its IPO earlier in May, and in its Q2 results today, it revenues increased by 19 percent to $24.6 million over the $20.7 million for the year-ago quarter. Net income was $2.71 million, little over the $2.37 million in the year ago quarter.
Online revenues increased by 27 percent to $16.3 million over the comparable prior year quarter, and represented 66 percent of total revenues. More details in earnings release.
Earnings: WebMD In Q2 Profits
WebMD (Nasdaq: WBMD), which provides health information through its online portal, has reported Q2 profits as revenue increased in several segments of its online services business. It earned $5.4 million in Q2, compared with a loss of $853K in the year-ago quarter. Revenues grew to $78.5 million from $56.6 million a year earlier.
Its online services business' sales rose $23.3 million from a year ago to $72.9 million. Within that unit, WebMD's ad and sponsorship sales increased by $16.2 million to $52.4 million, and the company's licensing revenue also grew, adding $7.5 million to $19.8 million.
Also, its CFO Tony Vuolo, has been named to the company's new COO position, while Mark Funston, who is the CFO of WebMD's parent company, HLTH Corp., will take on Vuolo's old responsibilities in addition to serving in his current post. More in release.
Earnings: FT.com Subs Rise 12 Percent But Pearson H1 Profits Dented
More online and print subscriptions to the Financial Times website and print edition helped boost first-half operating profit 28 percent at Pearson's FT newspaper group - but, thanks to poorer performing areas, the company posted an overall £104 million ($210 million) loss.
Subscribers to FT.com grew 12 percent to 97,000 on the same period last year. Newspaper circulation was up one percent at 450,000 but there was a 12 percent increase in print subscriptions. Ad revenue was up five percent, credited to "global reach and online presence".
But what Pearson called the "discontinued operations" of the Government Solutions and Les Echos subsidiaries caused a £122 million ($246 million) loss within the group. The international governmental services division was sold to Veritas Capital in March while sale of the French newspaper is "under way".
Release | Financials | Slides
Update: During a press conference, Pearson CEO Marjorie Scardino shed a little light on the chatter earlier this summer about a possible Pearson-GE bid for Dow Jones. AP: Scardino said the company was 'never interested' in buying DJ: "If your biggest competitor goes on sale you will have a look at it ... (but) We weren't prepared to put money in. Our interest was in whether we could make a different kind of business model."
IHT: Scardino said the company is "talking to all sorts of people about different distribution channels" about FT content. She posed the FT as a "niche" publication for global business leaders and politicians, compare to the WSJ's "high-volume consumer audience."
Earnings: Reed Elsevier's First Half Profits Up; Looking For Bigger Online Acquisitions
Reed Elsevier (NYSE:RUK), the Dutch B2B media giant, has reported its first half 2007 earnings, and net income rose to about $637.4 million, from $444.6 million a year earlier. Revenues was little changed at $4.6 billion, held back by the weaker U.S. dollar, reports Bloomberg. Online and electronic service are driving the growth at the company, which owns Lexis-Nexis, Reed Business Media (Variety and others) and others.
Digital and online information products grew by 12 percent and now account for 45 percent of total revenues. Sales at the company's B2B publishing unit rose 1 percent with online services up 20 percent and print falling 3 percent. Online recruitment ads grew 38 percent in the period.
Thomson Financial: CEO Crispin Davis said he is seeking acquisitions to boost the B2B division. Over the past nine months Reed has bought BuyerZone in U.S. and Emedia in UK, and noth deals were under 100 million GBP, but Davis said he was willing to consider larger acquisitions. Davis said he wanted to move more of Reed's print business online where revenues are growing more rapidly, insulated from fluctuations in the ad market.
Over the past nine months Reed has bought BuyerZone—a US online business for matching suppliers to business customers—and Emedia, a UK online marketing business.Earnings release | Analyst presentation PDF.
Earnings: Yell Boosted By US, UK Web Directory Growth Of Over 60 Percent
UK Yellow Pages group Yell saw revenue for the year to March 31 jump 28 percent to £2 ($3.9) billion