Internet Business Share Discussion Threads

[clueless] 23/6/2007 08:46

I think the biggest issue IBG faces is that its "robust" affiliate network is under threat from Google and their plans for a CPA network.

Google's strength is in IT rather than customer service and hence they are likley initially to attract many of the smaller merchants (the ones that make up a lot of AFs customer base). If their Google Checkout is anything to go by then you can expect some loss leading incetives to help them scale it up.

While they will no doubt find it harder to attract the Blue Chip merchants who need the personal service and hand holding, Id expect them to get a very large proportion of the "mass market" smaller merchants, probably initially using them alongside their exisitng affiliate network.

So while the likes of TradeDoubler would probably be relatively unaffected initially as their big brands will be slower and less attracted by this, small cost conscious business will be foolish not to try it out.

This would obviously threaten margins and volumes - hence perhaps why they seem to be gradually changing the business to become an affiliate.

No-one knows for sure how its all going to turn out, but its a big threat, and potentially this could mean that the share price will not recover from here (or at least not off the back of AF performance). Theres enough doubt to not tempt me back in even at these prices.

[muffinhead] 23/6/2007 00:53

The statement mentions that AF advertising is "robust". This to me means things are much the same and turnover and profits are not advancing at previous high growth rates. Alexa ranking is down in the last quarter, also slowdown in merchant signings.

The media side or especially Henoo obviously needs investment and advertising, which means spending money. We banged on about this recently and I am sure Maz got the message.

Reduced operating performance and the need for investment in the changing internet market.

Ken also mentioned smaller margins in AF presumably due to competition. I seem to remember reading about DGM having problems with margins in the UK and investing in Australia/Far East where margins were better in a less mature AF market.

So potentially low growth over the next 2 years until the results of investment hopefully follow through.

The buying in of shares to me implies investment will be in house and no further acquisitions for a good while.

This strategy can be very draining on patience and relies on a lot of trust by investors. Also there is potential for the company to go private with venture capital investors just when management begins to see results.

Too many uncertainties to hold long, so am out.

[shroder] 22/6/2007 20:51

It doesnt add up, you have on the surface a reasonably strong growth company, undervalued against its peers taking this course of action -

Why would a growth company want to use its funds in this way, far better return in purchasing suitable add ons

[muffinhead] 22/6/2007 17:36

i think fish and chips are on the menu for a while

[slapdash] 22/6/2007 16:15

I don't think Maz is a genius or some kind of amazing business man...

investors often personalise companies..

you shouldn't forget he bought the original dog that was IBG to market... yes he did revitalise it from about 1.5p but he lead it down in the first place...

and he does seem to have a mis mash of businesses....

[clond] 22/6/2007 16:08

i have topped up , cheaper than I bought in 2005

[stemis] 22/6/2007 15:58

I think the share price will bounce around as buyers come in to pick up cheap stock, triggering sales from disillusioned sellers seeing the chance to get a price they missed the first time.

The next influence will be the interims. IBG don't seem in any rush to get them out, although presumably (hopefully) they are giving careful thought to what they say.

[clocktower] 22/6/2007 14:58

Not a flinch on that volume..we have support here.

[clocktower] 22/6/2007 14:50

Maz is an honest man imo, so I think it offers longterm value as well Ken.

[kenatbabken] 22/6/2007 14:44

As my shares are running free after recouping my stake money with the sale
18 months ago I most probably will support it as the business has,nt failed
and I still believe in it.Its always horrible to see the portfolio take a hit
but its happened before and most probably happen again

[clocktower] 22/6/2007 14:27

Good luck Ken

[kenatbabken] 22/6/2007 14:20

Were there many sells at the bottom today? Or did it bounce straight away, I
may buy a few if it drops back to that level

[12345th] 22/6/2007 13:32

Talk about great timing (not!) ... Just read article in this week´s Money Week ("IBG powers ahead in affiliate marketing"), dated June 22nd, ie today) on IBG ... tipping it as a buy at 28p and part of a larger article on booming online advertising ... what´s more the MW article also refers to tips in The Guardian and on Motley Fool. Good value shares at 28p is the conclusion, bid or no bid.

Ho-hum ... what a load of balls. Still heavily long but thoroughly confused and fed up.

[yump] 22/6/2007 11:50

The forecasts clearly show good value.
To get on the right track though, sometime in the not too distant future I think IBG needs to have an absolutely clear statement about its business aims.

The share price would have been much higher in the last year if it had had one imo. Then the pain of reduced forecasts / reviews etc. would have been a lot easier to take.

I think the 'undisclosed projects that will lead to riches while using up resources in the short term' type statements are extremely misguided and show a naivety about being listed.

Very paradoxical and b. irritating, but those sorts of statements are the one's that cause share price rises in loss-makers.

[stemis] 22/6/2007 11:00

Interesting to compare IBG with DGMPBT'000s DGM IBG
2005 Actual - 494 413
2006 Actual - 2,237 1,116
2007 Forecast - 1,720 1,700
2008 Forecast - 720 2,200

Cash at 2006 584 1,375So who'd like to guess which company is valued the highest by the stock market?

[omlaysause] 22/6/2007 10:42

Yes agreed, reassuring and looks like they are gearing up to the fact next year will take a bigger hit due to the reinvestment stated in the last RNS. But still 54.5% PBT .... there are a fair few companies out there that would love to return that to the shareholders and have a much higher share price than IBG.

[stemis] 22/6/2007 10:42

Thanks for posting the numbers Baheid. I knew the EPS numbers but not the rest (although I worked back from the EPS). PBT of £1.7m is a bit higher than I had.

P/E of 8.5 for 2008 (which will be full taxed by the way) with probably 5p of cash on the balance sheet. Once this has settled down, I don't see why we won't see it back over 20p in the short term.

[tonyr] 22/6/2007 10:38

68steve:- "a economic downturn around the corner"
So, the synchronised global expansion is over, supposedly.

I think the pessimism is getting rather out of hand now....

[spacecowboy3] 22/6/2007 10:29

BAHEID101

Thanks for posting the Altium forecasts - I think they confirm what a number of people here have been saying - i.e. this is a setback but nothing like the disaster it's being painted by some.

[baheid101] 22/6/2007 10:13

New forecasts from Altium are as follows:

Current year (to October 07) PBT forecast down 10.5% from £1.9m to £1.7m. So PBT is now forecast to rise 54.5% year on year.

Next year (to October 08) PBT forecast down 29% to £2.2m from £3.1m. This represents growth of 29.4% year on year.

This feeds through to EPS of 1.7 in the current year (down from 1.9p) and 2.0p in 2008. So 13.3% growth this year rising to 17.6% next year.

So at current price of 16.25p the shares trade on a P/E of 9.5x and a PEG of 0.7 for the current year and a P/E of 8.1x and a PEG of 0.5 for next year.

In terms of cash on the balance sheet they had £1.375m at the start of the financial year and the old Altium forecasts had this rising to £2.266m for the current year. Not sure what the new forecast will be.





Next Year

[68steve] 22/6/2007 09:56

Done more than enough reseach over the last 3 years thanks but when you come out with a statement like Maz/Altium have and a economic downturn around the corner what can you expect.Enjoy your day trading.

[bonio10000] 22/6/2007 09:39

atomic dog

absolutely.