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Here's what CNET had to say on its conference call about the online advertising market, and the company's focus and financial leverage:

Our headcount ended the year at approximately 2,100 which is up 340 from December of 2003 and roughly 60 percent of this increase is attributable to investments made in the faster growing areas of games and entertainment and personal technology. The balance coming from acquisitions. Our revenue... per average employee increased 10 percent in 2004 compared to 2003, which is a nice increase considering that acquisitions brought into the mix often generate lower revenue per employee... than the overall CNET average, but should become more productive under our ownership.

During 2004 CNET increased its penetration of the 100 largest advertisers in the U.S. to 48. And that compares to 30 in 2003. And the vast majority of these new advertisers are non-technology companies in the areas of financial services, auto, consumer package goods and retail.

We have become less and less reliant on enterprise technology customers this year. This fact is examplified by 30% interactive growth for the year while our enterprise category actually declined, proving that we have diversified our advertiser base and are delivering solid growth rates in our other categories.

(Quotes from the CCBN StreetEvents transcript.)

Quick comment: The online advertising market is clearly growing. But the content business is less attractive than, for example, the search business, because it has much lower financial leverage. The evidience? CNET's rapid increase in headcount, and its growth in revenue per employee of only 10%. That's a metric that many investors will want to watch carefully.

Full disclosure: at the time of writing I'm short CNET.

Source: Cnet (CNET) on online advertising (quotes from the conf call)