There's nothing wrong with a timely board appointment. Shares of The Knot (NASDAQ:KNOT) soared 8% higher yesterday, and the only news out of the company was the online wedding-planning specialist's appointment of three new board members.
Did I mention that one of them happened to be a regional sales and marketing director for Google (NASDAQ:GOOG)? Or that another new board member is actually the CEO of Federated's (NYSE:FD) Macys.com?
If Google is in a buying mood -- and its $9.7 billion vault of cash remains intact, since the YouTube purchase is an all-stock deal -- how much of a premium do you think it would take to add all $625 million of The Knot to its bridal registry?
The objection at the altar
Do you think that the Google connection had a hand in The Knot's buoyant day yesterday? It's an easy theory to chew on. But even if The Knot and Google seem to be a match made in heaven, we've still got some words to smooth over.
In the spring of 2005, as many springtime brides were doubtlessly turning to The Knot to help map out that perfect wedding day, CEO David Liu was addressing the crowd at an American Press Institute seminar. He took a shot at Google.
"I think Google is going to become a bit of a commodity service that's no longer going to be relevant in 10 years," he said at the time.
Ouch.
Thankfully, taking a swing is never a dealbreaker. Disney (NYSE:DIS) took shots at Steve Jobs and his "Rip, Mix, Burn" mantra for Apple Computer (NASDAQ:AAPL), but the family entertainment giant still eventually coaxed him into selling Pixar and becoming Disney's largest shareholder.
If Google and The Knot are meant to be, they will overcome these obstacles. Destiny will find a way.
The perfect model
Put yourself in Google's glittery platform shoes. 99% of your revenue comes primarily from selling paid-search advertising. Then you have The Knot, a site where prospective brides spend an average of 14 hours apiece in that first frenetic week of planning. Do you think that Google would mind having this kind of captive audience? These brides (and grooms) are needy. They're vulnerable. They're looking to spend an ungodly amount of money.
The Knot, like Google, has mostly cashed in by generating leads for sponsored providers. If YouTube is Google's low-margin attempt to body-surf among the masses, The Knot could be its high-margin means of catering to the perfect niche audience.
A year ago, I wrote about The Knot being one of five companies that Google should look into acquiring. Google did go on to buy a stake in one of them, and a media giant beat it to another of the five. I have no reason to feel any different about my suggestion, even though Google would have to pay dearly, since The Knot's shares have subsequently exploded higher.
The Knot has been rattling along like a pair of cans tied to a "Just Married" car fender. With yesterday's close, the stock has officially doubled since I recommended the stock to Motley Fool Rule Breakers earlier this year. If you think that's something, four of the 24 stock recommendations from 2005 have gone on to more than triple!
Still, we're talking The Knot here, and those heady gains may well keep buyers away, while inspiring the company to grow on its own. That's fine by me. Most investors would have been tickled with a buyout offer in the teens a year ago. Now that the stock is moving aggressively into the low $20s, it's easy to understand why they wouldn't want their company sold off so early in its growth cycle.
Even though I can rattle off a hundred different reasons why these two stocks truly belong together, I can also point out that there are two big reasons why this is unlikely to happen. The first is Google, and the second The Knot.
It's a shame. Speculative investors were feeling love in the air yesterday, but it was only lust. Everyone knows that you don't need to plant an executive in the boardroom if your aspirations lie on bended knee.
Psst! Federated? It's your dance now.
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Longtime Fool contributor Rick Munarriz got married years before TheKnot.com was around, and he regrets that. He could have had a punctual person working the video camera that day. He owns shares in Disney, a Stock Advisor selection. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.TheFool has a disclosure policy.
