Miva Has Another UGLY Quarter
In what appears to be one of the ugliest quarters in company history, Miva just lost about 20% of their market value today:
The company posted a loss of $0.15 a share, with revenues dipping by 27% to $43 million for its final quarter of 2005. And it's not good when your operating expenses climb by 23% in a period when your top line is tanking.
The company generated 219 million paid clickthroughs during the quarter. That's a 13% reduction from what it produced a year earlier, despite growing its base of advertisers by 20%. This isn't a mixed bag -- it's just bad. Revenues falling faster than clicks means that the company is generating less money per click.
When will Miva and Looksmart finally die? Why has Marchex been going up while similar companies have been dropping like flies?
A thinning out
As I've said for some time there will be a major thinning out of the middle market taking place over the next year or so. With companies like Miva, Kanoodle, and more actively shopping themselves to potential suitors the whole 2nd, 3rd, and 4th tier of the market is in trouble.
Mamma.com reported a horrible 2005 as well citing a big portion of their ad sales team leaving to set up another company as one of the key issues. Baloney, I say they just suck.
Remember that the smaller players are interdependent on each other. It's a very incestuous business. If one, two, or three large "networks" dry up or disappear then it will cause a collapse in that market. Companies like Marchex may stand to gain from it if they are smart enough and position themselves well for that occurrence. I believe that they are thinking that way from the looks of their earnings. Plus Marchex has been smart about what they have purchased/invested in.
A lot of the lackluster earnings have to do with extremely poor traffic quality which compounds the problem and only makes it worse. Advertisers are leaving the middle market in droves because the big boys have convinced everyone that they simply have more reach and can offer better quality. Yet, in reality, they are burdened with the same issues as the smaller players. Better marketing message = greater success. Spin it, flip it, and throw it down. Sometimes your message is going to stick even though it might not be all that true.
Miva is Slightly Better Than Looksmart
If I had to rank Miva, Looksmart, and Marchex (which owns Industry Brains), I'd go:
1. Industry Brains
2. Miva
3. Looksmart
You can buy quality traffic on the first two, but it is a challenge and is often not worth the effort.
MIVA Took a Hit Form ThomasB2B
The exact amount is not known, but when ThomasB2B closed its internet doors, MIVA took almost a half a million in invested losses without much of an explanation from Thomas Publishing Company.
I'm waiting
For their ugly funeral, urination on the grave is mandatory.
MIVA are attempting to sort
MIVA are attempting to sort themselves out. I wonder if they are cleaning the books in expectation of better times to come. As for the quality issues, its still varied. I know sites that MIVA traffic doesn't work for, and I know sites that it does.
If they could clean up their publisher base, and push the pay per call etc, they could well make it in the long run
it is all about 'owning' your traffic
Google MSN Yahoo AOL Ask all OWN their traffic.
Once they own their own traffic they can do partnership deals that may even run at a loss just to increase the desirability of their inventory to advertisers through a single interface. e.g. Google's deal with AOL. And when you lose these deals (Yahoo and MSN) it is going to hurt.
So why does Miva go down? They don't own any traffic and will eventually lose every deal to the bigger players and be left with the crap traffic that causes Advertisers to lower their bids (ahhhhh I remember when Kanoodle and Findwhat actually had real search traffic)
So why does Marchex go up? basically they actually own some of their own traffic and with a good slice coming from one of the worlds top 5 domain portfolios it is traffic that they don't have to worry about Google taking a market share on. (short of some Google toolabr, IE browser or AOL ISP trickery)