Like a grapefruit wedding cake, The Knot's (Nasdaq: KNOT) fourth-quarter report is sweet and sour.

Revenues climbed 12% higher to $24.2 million, while profits fell to $0.08 a share from last year's showing of $0.45 a share. Pretty top? Ugly bottom? You actually have it backward. Wall Street was looking for a profit of just $0.07 a share on a more robust $24.9 million in revenue.

Don't let the bottom-line slip trick you. Last year's result was peppered by both a lawsuit settlement gain and a sizable tax benefit. Pre-tax profits still dipped, but only by a scant 6%. It's not ideal, but at least it was better than what analysts had been expecting.

The top-line results are also a mixed bag. A chunk of The Knot's business involves slow-growing print publications, merchandise, and bridal registry services. The company clocked in essentially flat in those areas, with online advertising -- now accounting for 55% of overall revenue -- growing at a healthy 21% clip. It wasn't all apples to apples, given niche site launches over the past year, but it's comforting in light of this past summer's steep price increase to its wedding services vendors.

That is important. I took the company to task last quarter for its greedy pace of rate hikes.

Price Boost

2004

10%

2005

10%

2006

20%

2007

30%

*Source: The Knot third-quarter conference call.

Naturally, the online growth hasn't kept pace with this year's rate increase. The company concedes that it has suffered vendor cancellations. Economic weakness won't help, but the company is better insulated than most Web companies.

Recessions don't slow down weddings or pregnancies, areas that The Knot counts on in driving leads to advertisers of its TheKnot.com, TheNest.com, LilaGuide.com, and TheNestBaby.com.

It's not as economy-hogtied as other lead-generating sites, such as Travelzoo (Nasdaq: TZOO), which relies on an appetite for vacation deals, or Bankrate.com (Nasdaq: RATE), with its financial-services content.

The company also plans on adding even more hyper-targeted niche sites, the way it launched The Nest for newlyweds as a place to go after planning their weddings on The Knot.

Online growth initiatives find the company projecting near-term growth in the mid-teens, with profit margins expanding given the high-margin nature of cyberspace. The Knot also continues to have partners in high places, like its online bridal registry deal with Macy's (NYSE: M), as well as content distribution through sites like Microsoft's (Nasdaq: MSFT) MSN, Weather.com, and General Electric's (NYSE: GE) majority-owned iVillage.

As long as the company can keep its expenses in check -- a tricky task given its bubbling headcount as it grows to address the many related opportunities -- this grapefruit cake may wind up being more sweet than tart.

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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 does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.