Bright Things Share Discussion Threads

[carl79] 05/3/2010 15:32

Yup, I don't think SG want to play in the same space as Ning. They are after a niche market and thus will likely never rank all too highly...but if you compare how many premium sites we have compared to Ning it is an altogether different picture. One that will hopefully improve as time passes...I'd be very happy with 10th of Nings overall network numbers but double their premium networks - in fact i'd probably faint with excitement! lol

Ning ultimately have a very viral model...whilst the SG free version is fairly viral, it is not what drives the strategy. The premium space is not viral - if anything people may not spread the word for fear of giving competitors tips...ie a celebrity fan site may like the fact they are the only site with a fully integrated social networking site so they remove all SG branding so competitors don't know at a glance how they did it...So, it is harder for BGT to grow in the way they want to but the reward is a sustainable model and happy shareholders - hopefully :-)

[the analyst] 05/3/2010 14:33

All sounds good to me Carl :)

This is why it would be nice a pre-close trading update. It's not essential, but would be useful for investors to see what progress we are making

Without any figures, it's almost impossible to come up with credible forecasts, although it is fun trying!

Perhaps even with the latest figures, it would still be impossible to make a decent prediction of growth - we are at such an early stage of expansion...

One thing that would like to know, is how much of that $50 pm figure was down to zocku and how much was SocialGO?

[airforce11] 05/3/2010 14:28

Ning are rated as 131 on Alexa, Socialgo are at 10617 so Gina is right so say that Ning have no MEANINGFUL competition just yet.

How can Socialgo increase market share against Ning and what can Ning do to respond to any perceived threat from Socialgo.

[carl79] 05/3/2010 14:14

Ok,

We seem to be adding around 22 premium networks per week (assuming linear growth after attrition is accounted for).

Assuming we only had 1,000 premium networks on 29th October (ie the "over 1,000" was not a low ball statement)

This would mean we currently have around 1,400 premium sites paying $50 a month - give or take I make this £42k per month...Half a mil per year.

Lots of assumptions but this premium growth rate (which i dont think still stands) would take a long time (it 20 years!) to reach 25k. We should see a hockey-stick rate of growth with V2 if done correctly so probably best to leave the math till we have more mature numbers...

BUT

25k networks at an av of £30 per month brings in £9M and yes, given your earnings multiple gets us to a 180M cap. At say 500M shares in issue, a healthy 36p per share...A nice 3yr aspiration...say 1.8k sites in March 2010, 7k sites by March 2011, 14k by March 2012, 25k by March 2013...?? Hockey stick moment in the above clearly happening in 2010/11...

Am I barking up the wrong tree?

[carl79] 05/3/2010 13:52

I totally forgot about that TA and just started looking at the rates card...my figures are underestimates then...two mins, i'll do some calculations...maybe they are getting far more from ads and uplift services than i thought (and maybe the concierge take up is more than 5%??)

[the analyst] 05/3/2010 12:58

Ad here's a link for ning's $55 pm figure (reported nearly a year ago):



"12,000 social networks paying an average $55 per month on pro features is about $660,000 per month, or $7.9 million per year."


EDIT
seems that ning don't include advertising in that $55 figure, whereas SocialGO (as far as I understand) lump it all together, then work out the average. I may be wrong on that though, just notes from the agm

[the analyst] 05/3/2010 12:56

Hi Carl,

October's Trading update had information on revenue at $50 pm:



"The Company's income has grown steadily from the first full month of operation
(March 2009) and it now has, in addition to many thousands of users of the free
service, over 1,000 premium customers paying us an average of approximately $50
per month. "


I agree that the advertising revenue from free networks will be almost zero. My guess would be an absolute maximum of 50 cents per (active) free network per month from those ads. And I'm being generous there!

I've always thought that the main purpose of the free ads was to 'take up space and annoy', so the owner thinks about moving to premium.

This might be the REAL reason they got rid of the $5 option - too many people may have been taking that cheap option to get rid of the adverts, when they might have otherwise gone for the $25 product

[the analyst] 05/3/2010 11:41

"so back to your point ref SEO, they need to resolve this and then bang the drum when they have a capable platform"

This is exactly what I expect them to do, once the technology is in place (i.e. V2).

Anyone that has used Wordpress will know how popular the SEO widgets are - they are probably the most popular widgets out there, particularly with bloggers that try to earn money.

So, I expect the SocialGO 'seo widget' will be very popular when it is released

[the analyst] 05/3/2010 11:20

Hi Carl,

I'm pretty confident the long term aim is to achieve MUCH more than $30 per network. Especially when right now ning are claiming $55 per month and SocialGO are claiming $50 per month.

When I say $60, I'm talking about a target for the point in time when they reach 25,000 users. I don't know how far away that would be, but I'd say at least 3 years and during that time I would expect them improve monetisation dramatically.

It's worth noting that the figure they use to calculate the average is the total company revenue divided by number of premium networks. That's how both socialGO and ning calculate the figure as it stands. So, the $60 also includes widgets and revenue from advertising on free sites as well as add-on services.

[norbus] 05/3/2010 04:47

Spot on; monetised sites need SEO to avoid breaking the bank buying traffic. That is why confirmation that they are still onto it is relevant, and hence I asked if I should write. SEO enabled SG will cut into the market like knife through butter as most sites wish for better interaction with its market but can't afford the cost of technical expertise to give them the features built in SG

[the analyst] 04/3/2010 16:30

That is tricky, yump - things definitely do differ between massively between sectors!

Very different from gambling searches...

[yump] 04/3/2010 15:59

@analyst
I'm seeing lots of voucher code and price comparison sites - but its actual products that they're listing with no content. They've just got hold of all the retailer datafeeds and created a page for every product.

Couldn't do it with gambling.

The problem is that with mass market consumables the comparisons and review sites kind of work and are useful to a shopper as there are lots of contributors, whereas with for instance a sport, (eg golf), there are loads of product pages on those sites with little content at all. Presumably getting ranked by site authority in general, rather than relevance of site to search query (so much for Googles encouragement to create a site thats useful to visitors). Actually create a site that millions of people use for mass consumable shopping and you can put up any old rubbish for more specialist areas and it will still rank well).

Try 'ping rapture driver' - although Google's results seem to change randomly from day to day recently. I used to play golf and half the first page results are just rubbish. One even has a putter as the first entry !!

Another one is just crammed full of Adsense adverts, which will work well because the pages are so c..p that everyone who reaches them is likely to click on one of the Adsense adverts and earn 20p for the site owner, while at the same time wasting 20p of the advertisers money.

imo its time Google took a huge axe to a lot of these or its really going to get overtaken by another search engine.

[carl79] 04/3/2010 11:11

Strange to see the pricce drop given that this morning seems to be buys...certainly the large one (trades on Plus btw)

[carl79] 04/3/2010 11:07

Good call Norbus, Done. Most recent entries in red...

TA, How many premium sites do you think it would take to justify a cap of £130M, 50k?? Or do you think that given the industry something more like 20-30k would be enough?

[norbus] 04/3/2010 08:59

Can you update no of shares in issue on the board header please

I'd be delighted to take a load of shares at 1.25 but very much doubt they would be on affer at that low level, as it does not sit with the end game plan usually conducted in these situations.

[the analyst] 04/3/2010 00:08

By the way, the recent fall in the pound against the dollar is VERY good news for BGT

[the analyst] 03/3/2010 23:59

Yup, I'm in agreement with Carl - most of us here are expecting another placing, airforce11

My guess, unless we get a very good trading update well before they have a placing, would be a price of 1.25p, just like all the other ones

I'd be happy with that

I'd also be happy if the people that take the majority of the shares are the Directors. Even happier if Vikrant increases his stake. I like Directors to have a VERY good incentive to do well via shares, rather than pay and bonuses, especially non-execs like Vikrant with his background, skills, connections etc. With plenty of shares and options, he will REALLY want SocialGO to succeed and will work much harder on making that happen

Of course, I'd prefer it if we had a placing at 2p+, or if they didn't need one at all, lol :)

Long-term, if you take the view that the aim is to build a company with a market cap of, lets say, £120m, then if they have 500-600m shares in issue by then, that is fine.

It would mean a long-term share price of 20-24p

Even with 1000m shares in issue, it would mean a share price of 12p

Of course, getting the market cap up to £120m will be no mean feat, but it IS possible, given the product they have and the valuations of others in the arena (ning, being valued at £500m, for example)

[carl79] 03/3/2010 23:17

It is expected already Airforce...not sure on timing but most expect more money to be required and we do not get the impression that the majority is coming from in the form of income just yet...

Norbus - at a price of 1.55, should money be required, it would likely be in the 1.25 placing region (assuming no further news was released etc etc). If the usual suspects take healthy % dilution for them is minimal if indeed evident - Veddis probably would in order to keep their stake over 4%.

Money does not last long when you are growing a business but we hopefully have a wee while yet before cash is required given the recent funds have not long been acquired - time for some news flow to improve the price has been my hope...and my hope is we have a good few months to score some investor browie points before cash is once again needed

What was your website - id be interested to see its structure as per the earlier conversation - cheers

[norbus] 03/3/2010 22:18

why would they do that with a £1m under their belt? why would Vikram's outfit agree to such { devalues his investment} or the Boys pre Vikram agree to overdilute? No placing at 1.25 unless they are about to go bust