21st Century Investor Relations’ Stocks & Sectors page highlights undiscovered micro-cap companies - typically low priced companies with market caps of 500 million or less - in three key sectors that we believe are headed for substantial growth over the next decade: Healthcare, Internet and IT, and Energy and Environmentally Clean Technology. Micro-cap companies typically lack Wall Street analyst coverage, are inefficiently priced and are often thinly trading as the proverbial “tree in the forest.”
Internet and IT Sector Update
Signs are pointing to 2011 as the year a sustainable IPO market develops, with the market leadership coming from the Internet and IT sector. There is currently a tremendous amount of private market financing activity for Internet companies, and major Internet deals are all over the news.
Since our last update, Facebook raised $500 million last week through Goldman Sacks, in a deal that values the company at almost $50 billion. Groupon rejected a $6 billion offer from Google, and then raised $500 million privately. It was rumored that one of the reasons that Groupon rejected the Google deal is that they were concerned with potential anti-trust issues. These issues stem from the fact that there are only a handful of large Internet companies capable of acting as an “exit” acquirer.
Speculation is pointing to a Groupon IPO in the next 18 months. If Groupon were to go public, it could then use its own public currency to buy other ventures in the same space. The SEC mandates that companies go public when they reach the magic 500-shareholder mark. In addition, VC’s and other investors are seeking to get liquid in order to circulate money into other deals to cash in on the anticipated “Dotcom 2.0” that is shaping up for 2011 and 2012. Major IPO announcements will continue to increase demand and eventually create an investor “feeding frenzy.”
The Internet is undergoing a transformation with the advent of Web 2.0 technologies, the proliferation of mobile devices and mobile commerce, and the trend toward Cloud Computing to reduce IT expenses. So it makes sense that the VC’s want to fund some of the Internet startups currently being launched, so they are looking to cash out in searching for the next Facebook or Groupon.
Since a rising tide will lift all boats, our strategy is to seek out small obscure Internet companies with no analyst coverage. We want to place special emphasis on the emerging Internet trends for 2011 with a couple of themes in play:
1) Mobile Commerce
We are currently witnessing an explosion in the proliferation of smart phones and tablet computers, and increasingly seeing the move from desk computers to mobile devices. Apple is forecasting shipping 65 million iPads in 2011, up from 20 million in 2010. As a result we are seeing an emerging shift by consumers and the rise of mobile payment technologies and applications designed to facilitate mobile shopping. According to PayPal, mobile payments made between Nov. 15, 2010 and Dec. 15 2009 increased 300% from the same period a year earlier. Mobile payment systems are starting to make in-roads in the US, especially as online payment systems become more widely accepted.
2) Web 2.0/Social Commerce
Facebook is adding e-commerce features to attract users, keep them logged-on longer, and generate higher advertising sales. The social network is teaming up with startups, vendors, and even giant Internet rivals to drive social commerce by turning its pages into online shopping outlets fueled by recommendations from friends who "like” buy. The market opportunity to invest in new companies in this space is enormous as confirmed by a recent launching of a $250 million social applications fund by VC stalwart Kleiner Perkins Caufield & Byers. The fund is seeking to invest in social e-commerce startups and application developers using the Facebook platform. Facebook is projecting $15 billion in advertisement revenue by 2015, so a lot of money will be made in the next few years by focusing on early stage companies who leverage the Facebook platform.
3) Online Local Advertising
The promise of the web has been a global one. It connects companies to telecommuters, outsourcers, far-off countries and customers worldwide. But a new trend in the web is bringing it closer to home and business. The "local web" is the way the Internet helps connect people with places in their hometowns, as well as with their business and travel destinations. For local entrepreneurs, it's about using the web to reach customers worldwide and vice versa. In the US alone, local online advertising is expected to grow to nearly one quarter of advertising dollars spent by 2014. Facebook - through its network of more than 500,000,000 accounts - is expected to earn more than $1 billion from local, online-targeted advertising in 2011. The recent Groupon news is placing a lot of attention on local online advertising. Giants like Google (GOOG: Nasdaq), Microsoft (MSFT: Nasdaq), Amazon (AMZN: Nasdaq), Ebay (EBAY: Nasdaq) and Yahoo (YHOO: Nasdaq) are eager to get in on the action of this burgeoning market and are currently playing catch up to Facebook.
4) Cloud Computing
This is a technology that uses the Internet and central remote servers to maintain all data and applications. Cloud computing allows consumers and businesses to use applications without installation and access their personal files at any computer with Internet access. This technology allows for much more efficient computing by centralizing storage, memory, processing and bandwidth. One of the results of the slow economic activity that we have experienced is that corporations have not invested in IT staffing or datacenter capacity, and will need to catch up as the economy recovers. The pent up demand is creating an enormous market for Cloud services. In addition, less than 5% of IT computing services is currently outsourced. IDC is forecasting a $1.6 billion cloud market for network equipment revenues used to power both public and private cloud deployments in 2011. The market for Cloud services could conservatively be estimated at $15-20 billion in 2011
We have been aggressively seeking ideas on the space, and have the following updates to report:
We are adding Local.com Corp (LOCM: Nasdaq), Monster Offers (MONT: OTCBB), and Iveda Corp (IVDA: OTCBB) to our watch list and have added landing pages for each company within our Internet & IT section.
Local.com Corp (LOCM: Nasdaq) — Local.com Corporation operates a local search Website - Local.com - with over 15 million monthly visitors, a private label local syndication network of approximately 750 United States regional media sites, a local distribution network for its advertising feeds, and a sales and advertiser services operation for approximately 50,000 direct monthly subscribers. By providing its users and those of network partners with robust, current, local information about businesses and other offerings in their local area, the company has created an audience of users that its direct advertisers and advertising partners desire to reach. Sales of advertising on Local.com and its local syndication network (LSN) accounted for 91% of the Company’s total revenues for the year ended December 31, 2009. The Company operates in three business segments: Owned and Operated (O&O), Network, and Sales and Ad Services (SAS). LOCM did an IPO in 2004 and was as high as $30 per share back in late 2004. In late November the stock ran from $3.50 to $7.50 on the Groupon news. On Friday, January 7, 2011, the company announced that Yahoo pulled its local contract in favor of Microsoft Bing, and LOCM was down 24%. Despite the setback the company has proven to be a survivor, and has demonstrated the ability to make money. We would not bet against these guys. LOCM could pull back further to its support areas of $4, but the stock has a big upside and is a strong buyout candidate with a number of big players including GOOG wanting to get in on the space.
Monster Offers (MONT: OTCBB) — A startup “Deal of the Day” company that recently announced its entry into the rapidly expanding Deal of the Day marketplace with the launch of its new multi-match search engine - www.monsteroffers.com. This new offering provides consumers with deeply discounted local offers by aggregating the top Internet Deal-of-the-Day websites all in one place, with an experienced entrepreneurial CEO possessing a successful track record of starting, building, and selling companies. The company recently introduced the Social Network Channel™ (SCN), a breakthrough social commerce platform and is getting ready to launch its unique crowd-sourced Monster Community based on the technology.
Iveda Corp (IVDA: OTCBB)— Iveda Solutions, a wholly owned subsidiary of Iveda Corp. (OTCBB: IVDA), is the premier online surveillance technology innovator and Managed Video Services provider. Based in Mesa, AZ and incorporated in 2005, the company develops and markets enterprise-class video hosting and real-time remote surveillance services. The company recently entered into a letter of intent to acquire MEGAsys Taiwan (MEGAsys). MEGAsys designs and manufactures electronic security and surveillance products, software, and services. Their software product provides system users with a more convenient, detailed, efficient and reliable graphics operation interface. This all-in-one system fully integrates automatic security, access control, and CCTV surveillance functions. This is a potential win-win deal since it provides synergies for both parties. The possible acquisition of MEGAsys would provide a front end IP camera solution, to Iveda’s recurring revenue managed hosting services. IVDA has potential to be the leading cloud computing service provider in the exploding mobile surveillance industry - currently a $1.5 billion market.We are currently investigating and have contacted these companies about possibly doing an interview and/or presenting to our audience. Our goal is to investigate and discover leading microcap stocks before they make major price advances, and are currently developing a community of long-term, like-minded investors. We would be interested in helping these companies expand their audience online. 21st Century Investor Relations builds online investor audiences for publicly traded companies using inbound marketing-based Investor Relations 2.0 programs.
To get profiles on undiscovered companies before they take off, subscribe now to our free newsletter: http://www.21webir.com/subscribe-news-letter.html
21st Century Investor Relations, Inc is not registered as a securities broker-dealer or an investment advisor with either with the SEC or any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.
The company itself or our website - http://www.21webir.com - make no recommendation that purchases of securities of companies profiled on this website or in this email are suitable or advisable for any person or that an investment in such securities will be profitable.For our disclosure and disclaimer details visit: http://21webir.com/disclaimer.html