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July 20, 2007




I know the meaning of "search type-in" and "typo-type in".
But "organic type-in"?
What do you want to mean by this term?
For me organic is search engine traffic...

Thanks in advance for the possible response.


***FS*** Generic intent, organic type-in traffic which arrives for nothing more than the keyword weight or gravity of the name itself.



I mentioned this company to you a while back...I really think this is the key for the big players when you talk about ramping up there revenues.

If accurate in 2006, InternetBrands rev was 95 million versus Marchex at 127 million..

I would guess Marchex could easily hit 200 million in revenues by simply developing out their top 10-20 sites.

Reading this provides me with some inspiration to work this weekend...

***FS*** How much was ebitda on IB tho?.. You can spend money to make money but you can't spend money as easily to make free-cashflow


What is funny with domainers is that they finish to only see domains.


For have been worked these last years with few of the services now owned by Internet Brands I can say they own a bunch of VERY VALUABLE SITES and SERVICES and their business and value it's absolutely not about domain names!

Trust me, their company worth largely more than 100 millions

***FS*** Don't get lost in the fog of the easily duplicable.. names are not duplicable.. technology is. Do i recognize that these folks have executed on vision and built value in a business there? Yes. Do I 'respect' it as something 'special' or 'unassailable'? Absolutely not.. This company can be rebuilt.. domains can't be rebuilt no matter how much money.. Speaking for myself but that's where the rubber hits the road for most domain folks.


Frank...I paged through Internet Brands's S-1 Filing...here are some of the key points I thought you would be interested in (my way of saying thanks for your great blog). The entire document can be found at http://www.sec.gov/Archives/edgar/data/1080131/000104746907005760/a2178793zs-1.htm
I listed just a few of the risks i thought you'd be interested in, but there are quite a few so it would make interesting reading to glance through them all when you get a chance. Feel free to post as comment.

• Builds, acquires and enhances branded websites
• Our websites attracted 24.5 million unique visitors in June 2007
• Our international audiences are rapidly expanding and accounted for approximately 24% of the monthly visitors to our websites in June 2007
• In addition to our consumer Internet business, we license our content and Internet technology products and services to companies and individual website owners around the world
• We currently operate more than 40 principal websites
o we define a "principal" website as one that had more than 100,000 unique visitors for the month of June 2007

• Our revenues decreased from $21.9 million in the first quarter of 2006 to $19.1 million in the first quarter of 2007, primarily as a result of a sequential decline in revenues in the consumer Internet segment over the last five quarters. In particular, our automobile-related websites have experienced significant revenue declines in recent periods. We may experience continued declines in these revenues and may be unable to achieve sustained growth in the future. In that case, our business and financial condition would suffer.
• Many of our websites, and in particular our enthusiast websites, rely on members of the public at large to contribute free, reliable and attractive content on a continual basis
• If any of our relationships with Internet search websites terminate or if such websites' methodologies are modified, traffic to our websites and corresponding consumer origination volumes could decline…We depend in part on various Internet search websites, such as Google, MSN and Yahoo!, and other websites to direct a significant amount of traffic to our websites and to generate customer referrals for our customer referral activities...If traffic on our websites declines, we may need to resort to more costly sources to replace lost traffic
• Prices charged to us for online marketing have increased as a result of increased demand for advertising inventory, which has caused our advertising expenses to increase and our margins to decline.

Rev Adj EBITDA Margin
2004 61.1 19.8 32%
2005 78.0 26.3 34%
2006 84.8 29.8 35%

Q106 21.9 7.9 36%
Q107 19.1 5.9 31%

Footnote: During the three-year period ended December 31, 2006 and the three-month period ended March 31, 2007, we invested nearly $75 million in 35 acquisitions. These acquisitions have contributed to the growth in revenue and Adjusted EBITDA

Q1 Revenue decline was the result of reduced advertising spending by our automotive and home mortgage clients, consistent with the industry-wide downturn in these sectors

***FS*** Thanks! I wonder about sustainability. I would be scared spitless taking something that isn't bulletproof to the US equity markets. You gotta do right by your shareholdrs IMO.. and leave a sustainable enterprise with upside (I'm a value investor)


Some follow up to your financial questions: Last year they did $85M revenue and about $17M income from operations. They earned some investment income and have some sort of tax loss carryforward, so their net income number isn't that relevant.

I should note also that the IPO is to raise up to $100M; the value of the company would be much higher.

***FS*** I don't understand how they sustain revs/traffic. but seems like a big valuation for machine in full motion. Not a boatload of obvious/low hanging latent value


What is interesting to note is the lead investment bank. Credit Suisse is a top tier technology bank. This says lots for the industry.

***FS*** Actually, that 'is' the story. More of this coming.. Deals don't usually get announced in Summer..

David Wrixon

This could be good.

If this goes for IPO then a number of Wall Street Analyst are going to have to do some research on the subject. They are going to be given the task of getting their heads around our Industry.

They may come to the conclusion that this particular venture won't fly, but they will find out where revenue comes from and where it goes and how to assess domain value. Once they have done that there is going to be much more interest in the kinds of assets we are all holding.

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