valuation by analagy:
I'm sure you've all read the extremely positive MSNBC article? Among the interesting tidbits:
1. DCLK serves ads for 1,300 web sites
2. Biggest clients include Altavista, Ameritech, Autobytel, Billboard Online, CBS Sportsline, EDGAR online, Egghead, Kelly Blue Book, Dilbert Zone, Travelocity, USA Today
3. DART now accounts for 17 percent of revenue, which is faster growth than the company expected.
4. next week may bring an announcement that iVillage and MiningCo are new clients for DART
5. DCLK networks audience reach if 47 percent of the 61 million people online according to Media Metrix
6. DCLK served 8 billion ads in March, up from 5.4 billion for the buy December month. This means that DCLK will probably easily beat their own projection of 20 billion ads served in 1999.
7. DCLK makes 50% commission on the ads that it serves
8. A new product called Boomerang will be introduced soon. It allows better tracking of an ads effectiveness, which is just the functionality that advertisers have been demanding.
You may be wondering what the valuation analogy is? I've been comparing DCLK with Excite in my mind, to justify the valuation of $6 billion, but I think a better analogy is with the online brokerage stocks which are capitalized at $8 to $12 billion. Does this seem inaccurate, given the hefty transaction fees that brokerage stocks can charge? Basically I was stunned to read the DCLK gets 50% commission on sales. This is an insanely high figure. It is an important figure to know when trying to gauge the additional revenue generated from new customers.
-Sanjay
PS. DCLK seems like a strong buy for the year. I would venture to speculate that another stock split and 100% growth seems possible for the rest of the year.
PPS. Disclosure. I haven't yet bought back in. Perhaps I should have done so before posting all this info? :) |
