Hard work is paying off for iVillage
In early June, the site announced an expanded sponsorship deal with Kimberly-Clark
It's certainly great news for iVillage, which over the years has added more content to its sites through internal efforts and a myriad of acquisitions. Also, the company recently launched a complete redesign of its site so that it would be more user-friendly (and yes, advertiser-friendly, too).
True, the second quarter was still a net loss of $326,000 million, but this was mainly the result of charges of $1.1 million for acquisitions. Wall Street had no problem with this; on the earnings news, iVillage's stock surged 12.55% to $5.92.
Part of the company's decline may be attributable to an increase in marketing spending, which may or may not pay its way in the form of increases in site visitors.
Growth is not just about acquisitions for iVillage. In the second quarter, the company tacked on 150 new advertisers and brands. No doubt, iVillage is also attracting top-tier customers such as Proctor & Gamble
Currently, the iVillage Network is ranked 44th in terms of traffic. In June, there were 14.2 million unique visitors. Of course, it's the No. 1 women's community site and is actually ranked as the No. 4 community site overall.
A key growth metric for iVillage is page views. Over the past year, page views increased 11% to 391 million -- despite a fall in unique visitors (which was the result of the unwinding various distribution agreements due to the acquisitions of other companies). Basically, brand advertisers rely heavily on page view counts.
Moreover, brand advertisers covet iVillage's female-focused demographic. Women still make most household purchasing decisions, and brand advertisers are willing to pay premium prices for this traffic.
But compelling content drives that traffic. In fact, iVillage is focusing more on multimedia (over 70% of its users have broadband). The company is also developing a search engine for women, which should be another big growth driver. In other words, investors can expect much more good news from this company going forward.
There's one big "if" here, and that's whether ad-based revenue will hold if and when the economy falters, as advertising revenue moves in near tandem with economic expectations. We're dealing in more concrete goods this time around -- a little less vaporware than during the dot-com bliss years -- but advertising remains an extremely cyclical business.
Fool contributor Tom Taulli does not own shares mentioned in this article.