Vertro Update – New Appbar Changes Everything
This week has been a great one for Vertro shareholders and for members of the GrooveVC community. Vertro’s stock price has increased markedly and done so in such rapid fashion that is has attracted the attention of many new investors. Vertro was the second biggest gainer on the Nasdaq Monday and traded over 1 million shares, which is pretty remarkable when you consider Vertro’s tiny float (2.9 million in the “true public float”). The result has been a large influx of new investors and more importantly, a large influx of new “investor/consumers” who have joined with the GrooveVC community to invest in Vertro stock, download the toolbar/appbar and show their friends and associates how to do the same. The GrooveVC website has experienced an enormous spike in traffic over the past few days that should result in more than doubling the record number of unique visits we have had in a calendar month and we are hopeful that many of you will become active participants in our community. Congratulations to long time participants for hanging on when you were probably tempted to take the first 100% return and run. We are confident that new participants who joined us after Vertro stock moved into the $5+ range will also get the opportunity to enjoy gains of over 100% in the weeks and months ahead. Just in case anyone needs reminding, the stock is still only trading at about 5x our expectations for Vertro’s EBITDA next year, our expectations are based on historical results, patterns and trends related to the LEGACY Alot toolbar and we believe the new Appbar announced last night could be a major game changer.
Why will the new Appbar make such a big difference? Vertro’s toolbar had evolved to the point that it was offering hundreds of buttons and applications for end users who could customize it (add features) to suit their needs. These buttons are great for making the toolbar more valuable to each user, but very few of them offered even the remote possibility of generating revenue for Vertro. Vertro makes 99% of its revenue from the instances where those people who have downloaded the toolbar choose to use the search feature it offers, then click on one of the sponsored links offered on the search results page delivered by Google. Thus, for all the bells and whistles offered with the toolbar buttons, its all still about how many of the toolbar users remember to USE THE SEARCH feature. This is where the new Appbar should make a huge difference – we believe that the Appbar’s design and functionality will result in more users opting to use the search feature more often and more users keeping the Appbar for longer periods of time.
The legacy ALOT toolbar looks very similar in many respects to the Yahoo or Google toolbar and it offers many of the same buttons with a few proprietary apps (ALOT Radio, To Do List, Screenshots, etc.). When you look at them in the same browser (I put all three one on top of the other) nothing really stand out about any of them. Each offers six or seven little buttons with icons and a nondescript little box on the far left side of the browser that is the search box. The new Appbar is very different in its presentation, beginning with the more prominent (taller, wider, more visually appealing) search box with labeling that is not distracting but lets you know what it is for in a way that is almost a call to action. The centerpiece of the Appbar offers larger more visually appealing icons for each app the user has chosen to add and these are located in a a sliding mechanism that allows a user to add as many apps as they want (not just six or seven) and easily access them. This is a huge improvement on many levels and we believe it will have a material impact on Vertros results when the base of users begins to represent a significant percentage of Vertro’s active user base.
In summary, we believe the new Appbar will have a major positive impact on Vertro’s bottom line as we get farther into 2011 and that we could see a major acceleration in Vertro’s rate of growth as the company is able to be more aggressive in their customer acquisition campaigns based on the higher revenue generation by the new appbar users. It is a great time to own Vertro stock and a great time for new members of our community to buy Vertro stock at only 5x our expected EBITDA for 2011, download the appbar and tell their friends to do the same. Keep on searching and shopping using Alot and spreading the word to your friends!
P.S. One of our community members suggested that all GrooveVC participants start using the new Appbar URL as a tag line for all posts on message boards. Given the enormous influx of investors taking a look at the Vertro story this week, it gives us that many more chances to convert them to one of our “Buy the stock/download the Appbar” converts. We love the idea and will start if off here – http://www.alot.com
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