I'm always leery of companies that report their quarterly results in thousands. Unless we're talking about a development-stage biotech, I begin to wonder why they're even public in the first place.
So when Answers.com
Another thing that Answers is splitting is answers. Company officials boast about how WikiAnswers.com -- the site Answers.com launched after the recent acquisition of FAQ Farm -- is on a growth tear. It is. However, it represents less than a quarter of the meager revenue mix here.
Answers.com is still the driver, but you'll have to dig up last year's quarterly report to confirm its moribund ways. The company's namesake site generated $2.27 million in revenue this past quarter, 8% less than the $2.46 million it scored in Answers.com ad revenue a year earlier.
It's at this point when you begin to wonder if the problem is with Answers.com or with its ad-serving partner, Google
Actually, Google is the problem, but not in a way that is negative to Google's AdSense program. The rub is that Answers.com relies on Google.com to derive "the vast majority" of its search engine traffic. As a resource site, Answers.com's reference pages typically rank well below those on niche-specific information sites like CNET
Things could have been different. Answers.com announced the acquisition of Lexico -- the parent of Dictionary.com, Thesaurus.com, and Reference.com -- last summer. The $100 million deal would have brought into the fold a collection of high-margin sites with a ton of natural Web traffic.
The rub is that Answers didn't have the money. It would have to turn to a secondary offering to raise the funds to seal the deal. When market conditions deteriorated, Answers canceled the stock offering last month. The deal is dead.
So where does that leave Answers? The company is looking to grow its top line aggressively in 2008. The optimism implies brisk strides at WikiAnswers.com, but can the company meet its $15 million to $18 million top-line target without a turnaround at Answers.com?
We live in a world with too many answers. That, in turn, will create even more questions for Answers.com.
Longtime Fool contributor Rick Munarriz can't remember the last time he cracked open an actual dictionary. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.