Internet Business Share Discussion Threads

[lord buffett] 29/6/2007 19:12

polzeath - 2518 - If "nobody offered anything like that" they wouldn't have held the strategic review in the first place, they would have simply dismissed those parties as time wasters.

[polzeath] 29/6/2007 19:11

A case of the blind leading the blind? Market says 16p is fair value right now. I'd have been inclined to consider 28p a reasonable offer if I were Maz.

Not a holder. Good luck. No clear USPs as far as I can see. Nor business logic going forward.

[lord buffett] 29/6/2007 19:07

polzeath

I disagree. I think it highly likely that the interest shown was at a level at least equivalent to the prevailing shareprice of 28p at the time, but not sufficiently attractive for the directors to recommend any such deal.

One of the reasons for holding the strategic review in the first place, as I understand it, was that enquiries from various sources were consuming quite a bit of management's time and resources, so it seemed like a good idea to sit down and assess the various options open to the company.

[polzeath] 29/6/2007 19:04

The Tesco model is strong partly because it's not very easy to obtain big retail premises in the right places and partly because Tesco are very good at what they do best.

We know IBG were not offered anything very appetising. Maz and the board must surely realise that getting taken out at 28p would have been a fair and generous offer. Nobody offered anything like that.

[krakow] 29/6/2007 18:31

polzeath,

"But it's not defensible or unique and can easily come under attack."

A bit like Tesco, then.

"The fact that nobody wanted to buy them for the going valuation speaks volumes as this is a hot sector."

We don't know what was offered. Do you?

[polzeath] 29/6/2007 18:04

I thought about investing in IBG when it came up on TMF in the Pub a while back and researched it at a tentative level. Decided easily against as even IBG can't say clearly what they do and where they make their money. The business model is weak and flawed. Yes, I understand where they make their money. But it's not defensible or unique and can easily come under attack. The fact that nobody wanted to buy them for the going valuation speaks volumes as this is a hot sector.

[12345th] 29/6/2007 17:51

Interesting post "what is a login?" Please tell us more about yourself, stranger ...

[what is a login ?] 29/6/2007 17:42

I do not think Maziah Darvish wrote the RNS profit warning himself. The style of his authentic BB post is different:

The official announcement from the baord that took "two hours" to word was very crumbly. Please note the use of the word "potentially" which Maz does not use in his BB post:

"However, the board cautions that both turnover and profits in the second half will potentially be lower than previously anticipated by the board due to the delayed launch of new advertising products."

Is "potentially" meant to offer a ray of hope? i.e. profits may not be lower than expected after all? I think not, but time will tell.

Also irritating was:

"This focus is likely to restrict profit maximisation over the next 24 months,
however, the board believe that this strategic focus will maximise shareholder
value in the medium term".

Poor language often goes together with poor thinking. I think in this case it means profits will be lower.

(I resolutely sold my small speculative holding after reading the RNS).

I was astonished to see a CEO on the free BB! But I did not like the BB post much either, even though the English was better. There is a tendency to counter attack: 'you are using the share price as judge jury and executioner'instead of dealing with the questions like what? which? and why? and how much? that the RNS leaves begging. Politicians are clever at this kind of rhetoric.

In fairness with hindsight I think the writing on the wall was already there when the "strategic review" was first mooted.I held because I thought the business or part of it might be bought up at a premium and even pictured WPP hoovering it up! The problem with certain types of writing is that you have to learn how to read them.

[12345th] 29/6/2007 17:02

Iam still holding, for my sins (which must be great indeed). Waiting for the two-year Aim tax break in September, although by then I will probably be showing a loss rather than the very large profit I so stupidly believed was underpinned by sound fundamentals.

[aleman] 29/6/2007 16:21

Thanks, hirsch, but I don't see the relevance to illicit adware. If somebody chooses to download search software to their PC, I don't see how any retailer can complain if it is all above board with a consumer choosing the option of a cheaper supplier from a legitimate range of merchants. I take it the lack of response means nobody here knows of a similar general transaction search, if indeed that is what I should be asking. For all I know it could be just like competing with a search on eBay and be a waste of space throwing up rubbish. I bought into Blinkx for the video search but I am just trying to get my head around the potential competition for an etail product they haven't even launched yet and I am not as fit to judge as many here.

[hirschnathan] 29/6/2007 15:58

Aleman read this

[aleman] 29/6/2007 15:43

Hirsch - That seems distinctly possible. But won't the cheapest merchants be happy to be in Blinkx's database, which will mean the software is likely to be popular with consumers? Transaction highjacker sounds misleading. It will really just be a transaction search. You find the product you want and they save you looking all over the net to find the cheapest. It sounds simple in theory, but maintaining the constantly changing database will make maintaining Henoo's travel search look like a picnic. My question was if anyone was aware of anyone else trying to offer the same kind of transaction search. (I'm not really trying to ramp Blinkx or infer anything for IBG - I'd just like opinions from those that work in ecommerce.)

[yump] 29/6/2007 15:43

I'm not sure whether I like the hijacking idea or not. On the face of it, its just saving you from perhaps visiting a load of different retailers yourself, or from the nuisance of trying to work out which price comparison site is up to date.
Following a multitude of links from a review site, many of which don't quite lead to the right place can be a real pain.

I think that's different from things like spyware/adware, which actually substitute their own affiliate id for yours, without the PC owner knowing.

Still poses the problem of how on earth do you do a reliable price-checking service anyway ?

[hirschnathan] 29/6/2007 14:51

Aleman

Blinkx software will not get approval from the affiliate world and I imagine as in the us (its similar competitors eg certain cashbacksites that attac the user) super affiliates will not want to deal with merchants that uses this software

[omlaysause] 29/6/2007 14:08

I don't think too many parallels can be drawn between the drop of DGM and that of IBG's. IBG design/write and maintain their own software, are profitable and are growing, the same couldn't be said for DGM at the time.
The large share price drop was/is a nightmare but if the company returns what they are hoping to over the short to medium term, share price will reflect the worth of the company.
Can I ask if you're still holding or have you sold out?

[bonio10000] 29/6/2007 14:06

12345th

can you please outline the similarities between DGM and IBG please?

[12345th] 29/6/2007 13:55

Forgive my melodrama, but don´t you think the share price drop has also been a touch melodramatic and that therefore my response is in fact quite realistic given the situation? It was the same when dgm came crashing down and failed to recover for years. IBG´s share price may now collapse further to the 10p area. This is an unmitigated disaster, and I know many here share my feelings.

[omlaysause] 29/6/2007 13:43

12345th
A touch melodramatic don't you think??
Nothing's changed in the last week and unlikely to now until the interims and even then it may not make much difference. I don't think the share price will change much now until we get better idea of how things are going after the finals come out next Feb.
Remember IBG will also be hit by bad days/weeks in the market as a whole.

[12345th] 29/6/2007 13:09

I love all this nice calm debate while the share price continues to threaten to break out to new lows! This is a perilous moment.

[aleman] 29/6/2007 11:00

Had nobody heard of anything like Blinkx's ecommerce transaction hijacker, then? I am curious how many companies are close to bringing out their own.

The Company's Transaction Hijacking service, expected to be
launched during 2008, involves an automated e-commerce price comparison service
provided to consumers via a free software download. The software monitors the
consumer's e-commerce transactions and, at the point of sale, compares the terms
of that sale to those available elsewhere on the internet. If the transaction
terms can be beaten by a reasonable margin, the consumer is alerted. If the
consumer chooses to transact with the alternate provider, the transaction has
been 'hijacked'. Blinkx is expected to generate revenue from payments received
from vendors for transactions generated.

[yump] 29/6/2007 10:12

Google have already done something to remove affiliate linked crammed sites and pages. Noone knows exactly what, but a couple of years ago there were a load of directories ranking highly, which were just full of affiliate links and not much else. False page titles about price comparision and review, when in fact they were just lists of products with affiliate links. Particularly in gift days, which carry a generous commission.

Lots of moans in the aff. community, but a lot of them have now dropped down the listings, leaving the actual gift day suppliers at the top. Much better for the consumer. Still a way to go and unfortunately if you go by the forums, there's also quite a few legitimate site pages that have gone by the wayside.

Googles objective must be to remain useful to the consumer, without the audience, all the paid for advertising would suffer. I would imagine that for Google, the organic search result quality is of absolute importance and they would not risk messing that up.

We all have gripes about the quality of the search results - some searches work very well, others are full of rubbish. Not an easy task to get an algorithm that can get rid of the rubbish, while keeping the relevant.

Google works on what could be called a common search motive ie. it can differentiate between your search terms, but not your motive. Thats why you get academic papers mixed in with shops. Some other searches I believe allow you to guide them with your motive for the search. That can be useful, whether Google will ever use it, who knows.

Perhaps we are all getting info. overload now and would like to be able to tell the search our motive. Choose from 'buying something' 'information' 'research' 'interest' 'entertainment'... there can't be that many options.

The disadvantage (an example) is that if you selected 'buying something', you might miss that post on a key forum, that Google pops up in the searches, that tells you the product sucks.

One of the things that made Google unique at the start was that mixture of results - I think that will stay as long as the founders are still around. A spread of information across all walks of life online.

[liarspoker] 29/6/2007 09:05

Ah yes, I have 2007 written down here instead of 2006 !!

Thanks LB.

[lord buffett] 29/6/2007 09:04

Liars

There are no earn-outs for Cheapflights.

The aquisition for Cheapflights was fully paid for at the time of aquisition last July.

Interestingly over two thirds of the price was paid for with IBG shares at 33.65p, so they got the timing of that one pretty spot on, the rest was funded from existing cash resources.

[hirschnathan] 29/6/2007 09:00

what earn out?

[liarspoker] 29/6/2007 08:40

Question: Will IBG get burned with the earn-outs for Cheapflight ?