THK network is a “clean clicks” driven advertising internet network which has achieved critical mass and is now accelerating top and bottom line growth as demonstrated by recently being rated 8th largest search network behind Ask Jeeves, and 6th largest yahoo distribution partner.
Accelerating growth is driven in a viral manner. Greater credibility of “clean clicks” and fraud detection drives ever more site and distributor credibility, better revenue splits and accelerated adoption, which in tern allows for advertiser direct sales with better splits to both web sites and THK. Overlay services like the recently introduced Second Bite recaptures abandoned shopping carts, only accelerates this acceptance utility and growth. Marginal revenues could be showing 40% marginal EBITDA growth. At some size key word auctions come into play, again viral growth.
With a fortuitous adoption of divisional gross rev accounting, which is the industry standard, network division could be 1/2 of 07 revs and EBITDA, with upside potential over whatever guidance is given.
The consumer product and service offerings benefit greatly from intra-company use of clean click affiliate networks which over time will result in decreasing use of ever more expensive key word auctions, a loosing arbitrage. Be aware of intra-company sales and co-marketing. The ad agency revs exclude marketing of network division services, about 1/3 of division revenues.
The comps can include MarchEx with a 23x 07 ex/EBITDA and the other networks at healthy valuations with similar high growth. Reminds me of Intermix with MySpace
Accelerating growth is driven in a viral manner. Greater credibility of “clean clicks” and fraud detection drives ever more site and distributor credibility, better revenue splits and accelerated adoption, which in tern allows for advertiser direct sales with better splits to both web sites and THK. Overlay services like the recently introduced Second Bite recaptures abandoned shopping carts, only accelerates this acceptance utility and growth. Marginal revenues could be showing 40% marginal EBITDA growth. At some size key word auctions come into play, again viral growth.
With a fortuitous adoption of divisional gross rev accounting, which is the industry standard, network division could be 1/2 of 07 revs and EBITDA, with upside potential over whatever guidance is given.
The consumer product and service offerings benefit greatly from intra-company use of clean click affiliate networks which over time will result in decreasing use of ever more expensive key word auctions, a loosing arbitrage. Be aware of intra-company sales and co-marketing. The ad agency revs exclude marketing of network division services, about 1/3 of division revenues.
The comps can include MarchEx with a 23x 07 ex/EBITDA and the other networks at healthy valuations with similar high growth. Reminds me of Intermix with MySpace
