Vertro Releases Non-Financial Q3 Metrics

October 6, 2010 at 11:27 am Leave a comment

Vertro released Q3 Non-financial metrics yesterday before the opening bell. Vertro stock closed with a gain of slightly better than 9% after trading as much as 15% higher earlier in the day on the highest volume traded in over five months.  Investors are apparently starting to realize what is happening here and we fully expect to see more money flowing into Vertro shares over the next few months.  The metrics released evidenced very strong sequential growth in Region One and astronomical growth in the “Rest of World” markets, which suggests to us that management has discovered new international markets that are delivering stronger ROI than what is being earned in Region One.  Historically, a toolbar in one of these “Rest of World” markets has averaged about one tenth of the cost of acquiring a toolbar user in Region One and it has produced revenue at a rate of about one tenth of Region One as well.  However, we note that management indicated in the most recent quarterly conference call that they are seeing trends in some of these new markets that could result in a higher ROI in some of the international markets they have been testing. The numbers released yesterday (3.8 million “Rest of World” toolbars as of Sept. 30) indicate that they have been aggressively pursuing growth in those markets, hence the 80% sequential growth in live “Rest of World” toolbars.  We believe this trend is very positive and note that it probably played a big role in the 30% sequential increase in search queries.  While investors should remember that the search queries generated in these “Rest of World” markets historically generate revenue at about one tenth of a what a search query in Region One might be expected to generate, the overall impact of a 30% sequential improvement in search queries should allow Vertro to achieve the double digit sequential revenue growth management has predicted for Q3.  We believe that many investors have doubted whether the company could actually achieve double digit revenue growth in the midst of the current economic environment, but yesterday’s release likely confirmed for many that Vertro will achieve this milestone and also that they have built a very strong base for further growth.  This caused Vertro shares to climb higher yesterday and we believe it will cause them to continue higher over the next few months.  GrooveVC community members who might be tempted to take profits because the stock is up well over 100% from where you bought in should reconsider, as we believe that the Vertro story still remains largely undiscovered by main street and institutional investors. When they “discover” Vertro, the shares will move even higher.  Keep searching, shopping and sharing with your ALOT toolbars and homepages!


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