Alan Meckler is one of the pioneers of the Web, having launched the Internet World newsletter in October 1990. His sense of timing has been impeccable. For example, he sold his traditional trade show business in 1998 to focus on his online media properties at internet.com.
It's no surprise that the dot-com bust was tough on internet.com, but Meckler seized the opportunity. He made a variety of acquisitions, such as for Jupiter. This resulted in a reformulated company called Jupitermedia (Nasdaq: JUPM).
Yet again, Meckler has deftly made a big bet with his business: online images. And the results are very clear in terms of the company's third-quarter results. The company posted revenues of $18.8 million, compared with $13.3 million for the same period last year. Net income was $5.1 million, up from $653,000 for the same period last year.
And, yes, a critical part of the growth has been through acquisitions of online image companies, such as Thinkstock Images, Thinkstock Footage, Megapixel.net, Comstock Images, Photos.com, and Clipart.com. Pursuing such microacquisitions has proven to be a very effective growth strategy. Just look at the success of Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), and Microsoft (Nasdaq: MSFT).
Moreover, the online images business is ripe for consolidation. There are only a few major companies, such as Getty Images (NYSE: GYI), and many small players. Jupitermedia also has the advantage of its extensive network of websites, which allows for low promotion costs to a targeted audience. JupiterWeb properties consist of more than 150 websites and 150 email newsletters. So far the model has been phenomenal, as the company generates 82% gross profit margins on its images business.
No doubt, expect the acquisitions to continue. And, most importantly, Meckler is very upbeat that growth will remain strong -- or, as he puts it, "extraordinarily positive."
Fool contributor Tom Taulli does not own shares in any of the companies mentioned.
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