comScore's Cash Call

The online advertising space seems to be littered with stacks of Monopoly money. Google (Nasdaq: GOOG  ) shelled out $3.1 billion for DoubleClick, while Microsoft (Nasdaq: MSFT  ) recently opened its wallet to invest $240 million in Facebook and buy aQuantive for $6 billion. But in order to actually make money from all this spending, the firms doing the purchasing need accurate ways to measure traffic and online behavior at their new acquisitions. That's the sweet spot served by comScore (Nasdaq: SCOR  ) , whose stock price has spiked 90% since its IPO in late June.

Q3 revenues came in at $22.4 million, up 39% over the past year. Net income was $3.8 million, or $0.12 per share, and adjusted EBITDA was $4.5 million, up 70%. comScore added 51 new customers in Q3, bringing its total to 837. Its international business also spiked 61% to $2.5 million, representing about 11% of total revenue.

To leverage its growing customer base, comScore has been aggressively investing in product development. The company launched five new products in Q3, in categories including behavioral targeting, search, and rich media advertising.

Despite all this, comScore's stock has plunged 18% over the past two days. I think the market's main concern is that the company has retained Credit Suisse (NYSE: CS  ) to sell 6.1 million shares in a follow-on offering, diluting its current shareholders.

Nonetheless, I'm still bullish on the stock. The company has marquee clients like Verizon (NYSE: VZ  ) , Google, Yahoo! (Nasdaq: YHOO  ) , and Microsoft. What's more, its new product offerings should hit critical mass next year. So long as online advertising continues to grow -- and all signs suggest it will -- comScore should be a good play on the space.

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