One of the biggest losers in Friday's trading was FindWhat.com
For those who got swept up in the wave of panic selling and cashed out, what exactly were you thinking? Sure, it's easy to get nervous. FindWhat's shares have climbed into the $20s from an obscure penny stock since just last year, but, then again, the fundamentals have improved as well.
After posting an analyst-thumping second-quarter profit, the company expects to close out the year by producing earnings of $0.48 per diluted share on $70 million in revenue. If paying just over 40 times earnings -- and nearly 7 times revenue -- doesn't appear to be much of a bargain, look deeper into the contextual advertising niche and the company's growth within the hot sector.
Sponsored text ads on search engines were pioneered by Overture
Yahoo expects the sponsored search business to double by 2006. FindWhat may do better than that, as it is looking to grow its top line by 63% this year. With double-digit net profit margins and a gutsy move to hike its pay-per-click minimum to advertisers this month, FindWhat has the upside -- with or without Espotting.
True, its ad-serving partners, which include Terra's
How do you feel about text-based ads? You will probably be seeing a lot more now that Google's AdWords and AdSense are swinging hard in an explosive sector, but beyond FindWhat and Google what's up with Overture? How will it pan out under Yahoo! ownership? All this and more -- in the Yahoo! discussion board. Only on Fool.com.