With profits, internet ventures get set for revival of IPOs.Google Inc. grabbed the headlines when it filed for its $2.7 billion initial public offering last month, but the wider hunger for Internet and technology stocks has investors in local dot-com survivors starting to think about exit strategies. "Market conditions are certainly going to create some excitement about search engines," said Tim Spicer Tim Spicer is a former Lieutenant-Colonel in the Scots Guards and CEO of the private security company (PSC) Aegis Defence Services. He is a veteran of the Falklands War and served with the British Army in Northern Ireland. , managing partner at eCompanies Venture Group, an early backer of Santa Monica-based Business.com Inc. And while noting that eCompanies were in no rush to cash out, he said the VC is starting to weigh its options. Many have reached that level already this year. Since the start of 2004, 32 Internet and related businesses have filed for IPOs, 10 of them since Google's April 29 filing. The charge to market differs distinctly from the exuberance of the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. market of the late 1990s. The key point: many of the companies that have filed or considering it are turning profits. Executives at L.A. Internet firms Business.com, PriceGrabber.com Inc. and BizRate.com Inc. said several factors have combined to enable them to bring in more cash than they are spending. These include technological advances that make tracking advertising effectiveness more accurate, a reviving online ad market and the sites' narrow focus. Jake Winebaum, founder and chief executive of Business.com, said the business portal's revenues have grown 20-fold in the past two years--gains seen as a result of technologies that let advertisers track results from their ads. Since 2001, after slashing slash·ing adj. 1. Bitingly critical or satiric: slashing wit. 2. Dashing; pelting: a slashing hailstorm. 3. overhead and operating with a minimal workforce, Winebaum said Business.com has been bringing in more cash than it spends. "It's become more like direct marketing, and the measurements are becoming more credible," he said. As return-on-investment measurements improve, he added, online advertising has increased and specialty search engines have seen their revenues soar. Chuck Davis  This article or section contains information about one or more candidates in an upcoming or ongoing election.Content may change as the election approaches. Charles E. , BizRate's president and chief executive, said the company has doubled its revenue for the past two years and expects to do so again in 2004. (Winebaum is a director of the company.) BizRate, founded in 1996 as an online research firm, transformed itself into a consumer-oriented comparison-shopping site. Advertising takes two forms: merchants pay to gain premium positions within rankings and retailers buy banner ads A graphic image used on Web sites to advertise a product or service. Banner ads come in numerous sizes, but are often rectangles 460 pixels wide by 60 pixels high. Also 460 x 55 and 392 x 72 sizes are commonly used. or placement in a list of sponsored links. Davis said the company turned cash-flow positive in April 2002 and has operated in the black since, although he wouldn't give sales figures sales figures npl → cifras fpl de ventas . He did say that tees from merchants accounted for 90 percent of its revenues. Still, turning cash-flow positive does not mean investors have seen any substantive return on the millions they poured in. The rebound of the capital markets offers venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. a chance to cash out portions of their equity before true profitability is reached. There's a lot to recoup recoup To sell an asset at a price sufficient to recover the original outlay or to offset a previous loss. . In September 2000, Business.com secured $61 million in financing led by the Financial Times Group and Cahners Business Information. Other backers included IndustryClick, a subsidiary of Primedia Inc. and McGrawHill Cos. The company has also received money from eCompanies and publishing magnate Mort Zuckerman, owner of U.S. News and World Report and the New York Daily News New York Daily News Morning daily tabloid newspaper published in New York City. It was founded in 1919 by Joseph Medill Patterson and his cousin Robert McCormick as a subsidiary of the Tribune Co. of Chicago. The first successful tabloid-format newspaper in the U.S. . BizRate.com was backed in part by a $20 million round of financing in 1999 from Attractor and Hambrecht & Quist and a $50 million investment in 2000 from Mission Ventures, Media Technology Ventures, Vignette Vignette A symbol or pictorial representation of the corporation on a stock certificate. Usually a complicated and artistic design, it is meant to make the counterfeiting of stock certificates as difficult as possible. Corp., Attractor and Access Technology Partners. "The company is a very valuable proposition at the moment," said Robert Kibble kibble baked dough that is crushed or cracked. Prepared usually by extruding and then heating-drying the dough. Used as dry food for dogs and cats. , managing partner at Mission Ventures. "We would make a lot of money from it." Mission has invested $6 million in several financing rounds since 1998. He said the shopping comparison site is keeping its options open. Those options include being acquired or going public. Kamran Pourzanjani, president of PriceGrabber, agreed that mergers, acquisitions and IPOs among niche search engines are on the rise and he did not discount the possibility of his company being among them. Formed in 1999 with the backing of a few angel investors An individual who invests his or her own money in a private company, which is typically a startup. An angel investor is not an employee or member of a bank, venture capital firm or other financial institution that normally makes such investments. , PriceGrabber has not taken VC funding, but would consider proposals. "Any good businessperson will look at all opportunities and make the right decisions," Pourzanjani said. That thinking, whether from VCs seeking to cash out or companies like PriceGrabber, combined with the buzz surrounding Google's planned initial public offering, is drawing even more attention to these sites. John Ardis, vice president of corporate strategy at Westlake Village-based online marketing company ValueClick Inc., said its clients are turning to niche search engines instead of Yahoo and Google because they are able see greater returns on their investments. That appeal is one mason ValueClick might dip into dip into Verb 1. to draw upon: he dipped into his savings 2. to read passages at random from (a book or journal) Verb 1. some of its $240 million in cash to buy one of the niche engines. "From an M&A standpoint, the niche search engines could be attractive to us," said Ardis. "They have great names with a good critical mass and good flow of customers." |
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