Recent wins with the NY Public library and FireFox increase my conviction that this company can one day rise from relative obscurity. The acquisition of Brainboost should help the business model evolve. I assume the NY Public library win will encourage other public library systems across the country to work with the company. Answers.com has an unofficial relationship with Google, which I think may lead to a formal relationship or an acquisition down the road. The stock has been somewhat volatile, trading between 9 and 14 over the past few months. But I think with the recent news there will be more stability in the stock price. Over the next year, the stock will trade largely on catalysts instead of fundamentals. After that I think that fundamentals will start to drive the stock as the rapid revenue growth, which I think looks sustainable, will start to add to the bottom line. Keep this stock on your radar.
3Q Results are highlighted below:
In the third quarter, the company generated $563,576, compared to $424,552 in the second quarter of 2005, or 33% sequential growth, and compared with $53,163, for the corresponding quarter a year earlier. The net loss in the third quarter of 2005 was $1,090,355, compared to a net loss of $1,601,986, for the second quarter of 2005, and compared to a net loss in the corresponding period of 2004 of $2,168,527. Management expects fourth quarter 2005 revenues to climb sequentially by 42% - 55% from the third quarter of 2005 to approximately $800,000 to $875,000. Of this, over 95% will be from Answers.com proprietary traffic and distribution channels. The remainder will be from subscriptions previously sold and other income. Further, the company expects to increase its operating expenses relating to growing its business and internal operations and therefore anticipates the fourth quarter net operating loss to approximate or be moderately higher than the third quarter.
