Burst Media Corporation Share Discussion Threads

[shooting_star] 13/12/2006 13:38

some thoughts on the CEO's article were published yesterday. Makes for interesting reading:



Internet Advertising Becomes Virtual Smorgasbord
By Dave Porter

(AXcess News) Reno, NV - The Internet has turned into a virtual smorgasbord of value for advertisers that everyone agrees is going to support further growth in online advertising next year.

Piper Jaffray & Co.'s Internet Analyst, Safa Rashtchy, pointed out the obvious about why Internet advertising growth will remain strong in 2007; citing the exodus of media dollars from more traditional advertising mediums to the Web, while pointing out that the Internet is more widely accessed. On top of that, new ad formats are surfacing, such as video, that are helping raise the CPM rates being paid to publishers.

Rashtchy said that with the increasing fragmentation of the Internet network ad agencies are positioned best to benefit from that growth - and he's right. His favorites were Google, ValueClick, and 24/7 Real Media, saying they had good "network models."

The analyst also noted that brand sells, meaning larger, more-visited websites are getting more of the ad dollars.

In a story Burst Media's CEO Jarvis Coffin wrote for Media Post today, Jarvis noted that ad dollars are concentrated across the larger Web brands. Quoting a story in Ad Age, Jarvis wrote: "According to the article, 72% of ad revenue in Q4 of 2005 went to the top 10 ad selling companies. Almost all of the ad revenue in last year's Q4 (95%) went to the top 50 ad selling companies."

Jarvis inferred in his story that there's more to the Internet's ad space than the top brands, using his time at the L A Times in sales as his case in point when he stated that "if you only want to pay to reach people in part of that region, or part of the people in the whole region, what do you do?"

While his point may seem to be that audience reach goes beyond top brands, his analogy of his love for the Red Sox is more explanatory in supporting his argument. "I read the sports section. I don't read the travel section. I follow baseball, I don't follow football. I am a Red Sox fan. I am the sum of my own parts and my media habits reflect that, now more than ever," wrote Coffin.

Last week, AXcess News reported that online ad rates in the first half of December actually declined - by as much as 20% - though big brand networks brush it aside - as did Rashtchy. Maybe because the details aren't available, but the fact remains that while ad buy in the Internet advertising world is rising - the consensus is the big brands are getting the highest dollar rates and I can't argue with that.

But something Coffin didn't say is an obvious benefit for his network ad agency. If larger ad network agencies are commanding most of the revenue they're also paying more attention - and promoting - their stronger brand publishers as well. So it's really a supply and demand argument. But this puts companies like Burst Media in a whole new light.

Major Internet ad networks have raised the bar on qualifications for signing up as a publisher. That means more Websites that could have qualified to sign up with say, RealMedia, last year, can't fit the bill. That leaves a lot of potential sites looking for a source and for companies like Coffin's Burst Media, the sign up rate of publishers this year are most likely higher as Burst publishers do not need as high a rate of unique visitors as the premium ad network agencies now require.

It's a logical result. But it also shows a shift is on the horizon in the Internet advertising world where network agencies like Burst will begin to benefit from better quality, or stronger brand, web publishers signing up. That could be a windfall for Coffin's company, but it might also mean that the larger network ad agencies are winning the battle but could lose the war if they're not careful and rethink their publisher strategy. After all, there's more to the Internet ad space than the top 50 brands, like Coffin says and their are more choices in the virtual smorgasbord for advertisers to chose from than ever before.

[shooting_star] 12/12/2006 09:27

The CEO posted an interesting article yesterday on online media daily. His words do not sound like those of a man who is overly concerned about the prospects for the business he is in



Old News, New Media
by Jarvis Coffin, Monday, Dec 11, 2006 6:00 AM ET
A RECENT COVER STORY IN Ad Age ("The Short Tail," Nov. 27), which has been well reported in the online trade press, was the old news that most of the ad dollars online go to a handful of large players. According to the article, 72% of ad revenue in Q4 of 2005 went to the top 10 ad selling companies. Almost all of the ad revenue in last year's Q4 (95%) went to the top 50 ad selling companies. Those of us who labor online have heard all this before--for years. So, why is this newsworthy? I have a hunch that it is because mainstream advertising is becoming unconsciously aware of the fact that having all that money in those few places is out-of-step with the media environment called the Internet. It's an anomaly.
To that point, one assessment Ad Age makes in its article accounting for the concentration of ad dollars is that they are TV dollars migrating to the Internet, which means they must behave like TV dollars. I suspect the assessment is accurate despite the absurdity; obviously, TV dollars belong on TV.

I've sold advertising for my whole career, except for two years at the beginning that I spent on the ad agency side. As a salesperson, I've had the privilege of selling for some of the world's foremost publications, including USA Today, Business Week and The Los Angeles Times, each of them very big ad sellers. Ad Age, in fact, was my first sales job. Despite the competitive advantages of each of these publications, my customers always had a problem it was hard for me to solve: how to allow them to reach their best, most important customer, and eliminate the media waste inherent in how we charged for and delivered their messages.

See, it's great that the Los Angeles Times, for instance, dominates the Southern California market, and it's accepted that it is a "must buy" for retailers and all others interested in reaching what was (as I recall) the world's eighth largest economic region. But if you only want to pay to reach people in part of that region, or part of the people in the whole region, what do you do?

It's an old problem, but it has an answer in today's media economy: the Internet. Consumers were first to recognize this. They bit into the Internet hard and haven't let go. The Internet solves the same problem for them that it solves for advertisers: it eliminates waste. I read the sports section. I don't read the travel section. I follow baseball, I don't follow football. I am a Red Sox fan. I am the sum of my own parts and my media habits reflect that, now more than ever. Indeed, the secret to the Internet's success long-term will be how well aligned its value is with the needs of both consumers and advertisers, which is the case with all great media.

This is all easy to understand, but harder to put into media practice. We can tick off the reasons for that, too: fear, entrenched power of established media, budget scarcity, measurement and standards, creative flexibility, media planning resources, etc. We could be talking about the advent of cable TV or FM radio. The forces at work are the same. First the audiences get it ("I want my MTV"), then we wait.

We know all this, we Internet laborers. So, my hunch is, it's dawning on the broader market that something's got to change. TV dollars do not belong online. It's not a good answer. Internet dollars belong online doing for advertisers what the medium does for consumers (which does not, by the way, include spending much time hanging around portals).

The story the ad trades should be running on their covers right now is the emergence of the ad network as a dominant life form online (see Dave Morgan's column, "Ad Network Resurgence," for instance). That's the story, taking place in real time, that comes after the one about how ad spending is concentrated on a handful of top Web sites that mimic TV. The ad network story is interesting because it implies that the market needs distribution, not concentration. The market is reacting to the fact that the ability to efficiently and transparently access lots of Web sites is somehow important to eventual success. That may not be in the numbers from Q4 of last year, but clearly many people think it will be in the numbers going forward. My bet is we'll read about it in the ad trades in November, 2008.

.............................................................................
I was a little suprised to see Burst media sell off towards the end of last week.

Running the maths on my prior estimates at today's share price suggests 2007 EV/EBITDA is below 5x. This could easily expand to 9x in my view on any +ve newsflow on management's handling of the cost base. Apply a 9x multiple would suggest stock price upside to over 30p

Price 18.5p
Shares outstanding 82.93
Market Cap =£15.34m
Net Cash as of H1: £6.65m
Enterprise Value=£8.7m
Net Cash as a % of Market Cap=43% (Per Share is 8p)

FY06e ESTIMATES
Rev $24m i.e. £12.57m
EBITDA $2.4m i.e. £1.26m (pre non cash stock option expense)
EPS 1.17p (pre non cash stock option expense)

FY06e MULTIPLES
EV/Revenue =0.69x
EV/EBITDA = 6.9x
P/E =15.8x (would be a lot lower if you looked at this ex-cash!)

FY07e ESTIMATES
Rev $27.6m i.e. £14.45m (I assume 15% rev growth next year is achieveable)
EBITDA $3.5m i.e. £1.83m (pre non cash stock option expense)
EPS 1.70p (pre non cash stock option expense)

FY07e MULTIPLES
EV/Revenue =0.6x
EV/EBITDA = 4.75x
P/E =10.9x (would be a lot lower if you looked at this ex-cash!)
EPS growth 45.3%

[wiganer] 09/12/2006 23:34

have added to header

[wiganer] 08/12/2006 18:43

Intriguing little tick-up just before the bell.

[wiganer] 08/12/2006 15:11

Talking of "Reg S" companies I supect today's fall has been exacerbated by today's news about LDG, which follows on from the recent Skycap debacle.

Unfortunately such events lead decent US-based/Reg S AIM companies to get tarred with the same brush.

I think this is one of the reasons BRST got hammered so badly and also that GKR has struggled to command a decent valuation.

In the long run though value should out, assuming that both BRST and GKR are decent honest businesses as I believe.

[wiganer] 07/12/2006 17:16

They tend not to support shares of "Reg S" companies.
My day-to-day trading account is with TDWH who do.
Bit of a pain, but there you go.

[kenatbabken] 07/12/2006 16:34

I,ve got 100,000 in mine why won,t Selftrade let you hold them

[wiganer] 07/12/2006 16:32

Good luck Ken. I am looking to get back in at some point, though unfortunately I can't put in my SIPP where I'd ideally like to hold, as the broker for my SIPP is Selftrade...

[kenatbabken] 07/12/2006 16:21

No problems Wiganer,It went up on no news so always likely to fall back,I
won,t be selling any until it gets back to its IPO price which if it happens
will give me a massive profit

[wiganer] 07/12/2006 16:06

Am out of BRST completely now for the time being, as I think it might pull back a little more before any next leg up. Made a decent enough profit overall, considering at one stage my investment was showing a 60% paper loss!

[wiganer] 05/12/2006 15:00

I'm also now avoiding Russian/FSU stocks, after some losses. I just feel those countries are a bit too "wild east" the moment. I'm not completely anti-oriental though, EPY being my biggest holding, and a great performer for me over past few year.

[kenatbabken] 05/12/2006 14:48

I did have quite a few but just running a small amount now,Like you I,m a bit
wary of chinese stocks

[wiganer] 05/12/2006 14:44

Nope, have given SOLA a miss, as am being a bit cautious on Chinese small caps, in light of experience with Bodisen, where fortunately I managed to trade in and out at a profit, before its price collapse, but more by luck than judgment. If you hold SOLA, well done, though I do think it's worth keeping one eye on the exit door.

[wiganer] 05/12/2006 14:25

I took profits on half my BRST at 21.5p, as part of overall scaling back of my shares portfolio. Happy to let the rest run.

[kenatbabken] 05/12/2006 14:20

CR

Off topic but have a look at STBR (It was a cash shell, now taken over a Dartford firm Travail),Turnover 3.6m pbt 0.8m and Market cap 4.1m
let me know what you think

[wiganer] 04/12/2006 15:13

My reading of post 146 is that if it were not for the fact that it is a US company the last 6 months results would have shown a $1.6m profit, giving annualised EPS of c 6cents a share.

No wonder it bounced off 13p. At that level it was on a de facto P/E of sub- with $12.7m.

Still cheap and if it wasn't already my biggest holding I'd be adding.

[cockneyrebel] 03/12/2006 12:20

Have been looking at these more over the weekend.

The decent wadge of cash is very comforting. £19 mkt cap approx and they have £6m cash. If they get back to making the money they were making a couple of years ago they are going to be mighty cheap imo.

CR

[kenatbabken] 02/12/2006 09:07

Wiganer,Can you put this in the Header please so others can use it for contacting the company



William E. B. Davlin
Burst Media
8 New England Executive Park
Burlington, MA 01803 USA
tel. [phone]
fax. [phone]

[e-mail]

[kenatbabken] 02/12/2006 08:50

The reply from Bill Davlin

Hello Ken,

Sorry for the delay in getting back to you, but we are in the middle of year
end planning so things have been a little crazy. I am on the run, but I
wanted to get you some answers before the weekend.

The stock comp charge is a US accounting requirement in order to reflect a
hypothetical value of the cost of options. This is a charge that will never
affect cash. There are many problems with stock comp charges as currently
required and a great amount of debate as to the value of this journal entry.
Personally, I do not assign any value to stock comp charges. Most Analysts
in the US add Stock Comp back to get a more accurate reflection of
performance. You will continue to see a stock comp charge each year, all be
it much smaller. I would be more than willing to have a detailed discussion
on this topic, but it would be best to do that over the phone because it can
get complicated.

With regards to the Nov 6th trade, remember that AIM is a double count market
(like NASDAQ, but not the NYSE), so only 7.56 million shares traded hands.
Also note that as a US Corporation, the standard "Notification of Holdings"
requirements do not apply.

As for news announcements, thank you for your suggestion. We have discussed
it, but have decided to wait for the moment. I am sorry that I can't say more
on this topic.

If you have any other questions, please do not hesitate to contact me. If you
want to set up time to speak, let's pick a time and I will give you a call.

Thank you for you support and investment.

Cheers,

Bill Davlin

[qs9] 01/12/2006 20:19

Great strength last few hours of the day, reckon 30p+ is on the cards, then I personally may review the holding as will undoubtedly be some profit takers....any +ve news however and given how tightly held these are, they could fly a lot higher IMO.....DYOR etc

[sigora] 01/12/2006 19:08

Guys whats your short term target for these beuts?

[cockneyrebel] 01/12/2006 18:56

By the way Daydreamer - looks like you started buying @ about 26p by your posts on the thread so not quite as smart as buying at 13.5p ay

CR