Vertro’s Record Revenue on Cyber Monday

December 3, 2009 at 11:52 pm Leave a comment

Vertro management issued a press release yesterday indicating that they had achieved record revenue on Cyber Monday, November 30, topping the $100,000 single day revenue mark for the first time in Vertro’s short history. Vertro’s operations scored $106,000 in revenue, a figure they indicated to be 9% higher than the previous three Mondays.  These numbers give us ALOT of food for thought:

1) We know that Monday’s are typically the best day of the week for search traffic and ecommerce in general, so we can assume that the +/- $97,250 that they have achieved on the previous three Monday’s is somewhat higher than could be expected for an average day in any given week.  Playing with the numbers a little here – suppose that the fourth quarter’s average daily revenue comes in at approximately 5% below what they did on those “non Cyber Monday” Mondays?  That would mean that Vertro might achieve revenue of $97,250 x 95% = $92,388 per day.  Multiply that by the number of days in the quarter (92) and you get $8,499,696.

The lone analyst covering Vertro has predicted that Vertro will achieve EBITDA profitability in Q4 on $8.3 million in revenue.  Might we be on the crest of an upside revenue and earnings surprise?

2) Is Vertro starting to see an impact from the GrooveVC users who were previously using Yahoo, MSN or Google, but now use ALOT for all of their searching and shopping?  In our monthly update, we take the number of active community participants and multiply by the average weekly revenue generated by “control group #2” in the experiment we undertook during the due diligence phase to give readers an idea of the potential impact that the Groove could have on Vertro’s results.  While we have no way of tracking the actualy usage by Groove participants, we have always believed that the increased usage from our members would make an significant impact on the fourth quarter results and it is interesting that management is starting to release indicators that lead us to believe that revenue might be trending  better than they initially expected. We continue to believe that Vertro will beat the $8.3 Million revenue estimate due to the increased revenue generated by the searching/shopping of the GrooveVC communitty.

3) One of our members had posted an idea in our online forums that we shared with the blogosphere on November 18.  The gist of the posting was that one could use ALOT to search/shop all of his/her consumer financial products to get the best price and then invest the savings in Vertro stock. Another member of our community who read that post shared an interesting thought with me after reading Vertro’s Press Release yesterday. What if the entire Groove community decided to shop those products on the same day?  With all the insurance, banking, mortgage and brokerage companies paying $15 – $30 per visitor to get their links pushed to the top of the search results, just one person shopping one aspect (i.e. car insurance, life insurance, homeowners insurance, brokerage accounts, credit cards, online banking, home equity line of credit, consolidation loan rates, etc.) of their consumer financials would likely generate over $100 in search revenue for Vertro if they comparison shopped the top 10 – 15 listings before making a purchase.  If 900 or so Groove members did just that or some even shopped two or three components, the Groove participants alone could drive more than $100,000 in revenue for Vertro in a single day regardless of which merchant they ultimately chose to do business with.  Add that to the revenue generated by the other 5 million plus users that day and its easy to see how quickly Vertro’s revenue could ramp materially higher in a very short time frame.

Keep searching/shopping ALOT and keep showing your friends, associates and colleagues how to do it.  They can still buy in at these levels and enjoy exponential upside when everyone else figures out what is happening here.

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GrooveVC Community Update – December 1, 2009 Give ALOT This Christmas

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