Darrell:
In my opinion, unlike most internet stocks, TURF will be very profitable.
Guess your time horizon is longer than the "foreseeable future", eh? As long as TURF remains a sub of DLIA their costs are going to be higher than they otherwise would be. DLIA is required by IRS regs to charge TURF a minimum of 105% of DLIA's costs for the goods and services provided by DLIA to TURF. So, one can make the argument that it's going to be tougher for TURF to show a profit than other typical, stand alone, Internet retailers because TURF's infrastructure and merchandise costs are 5% higher than they "should" be.
The royalty deal between TURF and DLIA certainly isn't going to help TURF on the profitability side. They have agreed to pay 5% off the top to DLIA on any sales of DLIA merchandise.
Make no mistake, DLIA's losses will be huge going forward. The Internet is all about getting big, fast. The only way to get big, fast is to spend mucho dinero. Losses, losses and more losses. Focus on revenue growth, page views, registered users and unique visitiors. That's how the Internet game is played.
drakes353 |
