Josh Silverman on GuruNet (GRU)

May.17.05 | About: Answers Corporation (ANSW)

Josh Silverman outlined his perceptive thoughts on GuruNet's (ticker: GRU) Q1 earnings results in a comment. Here they are in a main post for the benefit of those who read The Internet Stock Blog in RSS form:

As you know, I have long been a bear on Gurunet -- but this quarter was even worse than I expected:

- Revenues were $175,633, which is pretty poor for a company that (before reporting) had a market cap of over $150M. To make matters worse, about 1/3 of that # was attributable to its discontinued subscription product.

- Further detail and color provided on the call shows that although GRU is steadily building revenue, it is ramping at a snail's pace:

  • February 2005: $16,000
  • March 2005: approximately $91,000
  • April 2005: approximately $91,000 (from call)
  • May 2005: approximately $120,000 (from call)

- Rosenschein refused to discuss click through numbers on the call, but he seemed to admit that Gurunet failed to meet the click through rate of its search engine peers. He said that Gurunet's business was different so it wasn't fair to expect it to live up to Google/Overture click through rates and CPC charges.

- One positive item was adding Larry Kramer, CEO of CBS Marketwatch, to the board of directors. I believe this was a good move.

GRU chart below.