http://money.cnn.com/2007/09/27/technology/marchex.biz2/?postversion=2007092713
New Story in CNN Money about the local moguls.. This company is so obviously undervalued to me. I understand the name-side and view that alone as more valuable than the cap of the entire co.
They originally bought a scatter-shot name portfolio with pretty high quality generics and have gradually steered their ship towards a local search story. They have lots of organic visits in those domain names.. lots of local users they can funnel to local advertisers.
Domain portfolios embody several "stories" at once.. There is the local dynamic, the vertical dynamic.. the fact that you can reach all sorts of fragmented interests, the fact that you have no upfront traffic acquisition cost.. the fact that you have the ability to create scores, hundreds or thousands of micro-brands.. the fact that you have a reverse search engine of sorts. So many stories.. Unfortunately the street can only understand one such story at a time.. and if you tell two different stories investors perceive things to be weird and confusing. This team has chosen to pursue the local search story and build out infrastructure accordingly. I think they are going to be very successful.
Stock at $9.49 with a 431mm cap .. If I didn’t already own a similar co I would buy this company.
Compelling article.
Very.
I agree with Whizzbang’s blog posts regarding Marchex and Dark Blue Sea… I can’t afford generic domains, but I can afford their undervalued stock and keep buying more whenever I can!
“This company is so obviously undervalued to me. I understand the name-side and view that alone as more valuable than the cap of the entire co.”
Perhaps management is adding “negative value”. With every set of results it just looks like a company going nowhere, they could have continued to buy big portfolios after ultsearch as opposed to the dubious purchases they have made. I would like to see it bought out, maybe a co like demand media will make a bid for it if the stock price gets low enough.
This article is engineered hype designed to instigate a bidding war between current Marchex suitors Idea Arch and Microsoft. IA (aka Verizon) will win because they need Marchex’ technology to create and sell web pages to local advertisers who have no idea how to do it themselves.
The question is what will Yun do with the premium names that didn’t go into the Marchex deal. The ones in the Swiss account.
What a great article and nice references to Schilling!
Microsoft and Verizon? I can’t imagine these companies being interested in Marchex, perhaps they would like to sue them though!
I thought Marchex was very undervalued at $15 too, reason I didn’t pull the trigger is because I couldn’t find information about their domain portfolio (is it littered with TMs?).
Instead I put my money on Verisign…with all domain owners doing multi-year renewals ahead of the Oct 14th price hike, they are bound to surprise Wall Street on Q3 earnings and will guide up for Q4.
Frank you agree on Verisign as a domain price play?
Frank, let me buy mchx stock before you start buying up stuff…so i can ride this stock up…LOL
So Frank, do you really think its a good buy right now…or should i wait?
do you think the stock will go down a little more?
Frank, the subprime bull crap that they talk on cnbc all day…dont have nothing to do with this company, correct?
thanks.
The domains in the Swiss Account?? Sounds like the makings of a mystery movie – “Raiders of the Lost Domains”. Brad Pitt and Matt Damon search for the hidden Swiss Bank account number and password to get to the lost domains, before the evil Search Engine Company finds it first. lol
***FS*** That’s not a bad plot line (idea).. seriously.. needs some work but you’ve got something there. Most heist movies involve 50-100mm .. what’s a bucket if 1000 killer domains worth? 1-2mm per name?
“current Marchex suitors Idea Arch and Microsoft”
Some inside information or just speculation?
***FS*** I think it will be more along the lines of IAC.. or New Yort Times.. but with this cap it’s bound to happen.
Frank,
On a related note.
Microsoft is turning into a domainer in India.
Check out their Personal email id on their site
http://coolhotmail.com/
***FS*** This is a great idea, many existing domainers have had in the past.. I think MSFT could get it to catch on and they clearly have the infrastructure to run with it and build it out.
Frank,
So it sounds like you were the broker? I hope you got a broker’s fee. While it is nice to have aftermarket places like Moniker, Afternic, Sedo, tdnam, etc., I think there is a need for a discreet, trustworthy, highly-visible Lee Steinberg/Jerry Maguire-of-domains-type. A “face” and not just a logo. I think Calvin outweighs the name bodog. Might we see The Schilling Agency in the future, or is it here?
RH
***FS*** I didn’t make a dime.. just a few introductions/meetings .. helped the space evolve tho.. and built some great friendships. While it sounds cliche’: “that’s better than money”
Well sprint is in bed with MS on live local search together with mobile application:
http://gizmodo.com/gadgets/smartphones/sprint-and-microsoft-debut-location+aware-local-search-301049.php
Microsoft’s Live Local is powered by the Microsoft Virtual Earth platform. Five patent applications were published at the US Patent and Trademark Office this past week which detail aspects of how Microsoft’s Virtual Earth works, including roof-top overlays, virtual Earth images, real time driving information, user privacy, and community based recommendations.
So since Google is in bed with Apple/ATT it seems this leaves Verizon needing help and the recent string of acquisitions by IdeaArc are right inline with everything Marchex is trying to be with the salesforce and relationships they don’t have… and then there have been these:
http://biz.yahoo.com/bw/070912/20070912005262.html?.v=1
Of course you have Donnelley and Business.com for one domain due to the leverages and synergies of their local forces.
http://www.dmnews.com/cms/dm-news/ad-agencies/41964.html
IAC and NY Times have neither of these other assets to add value.
Dave Everson may have more of an inside track on this as has been covered on private forums
But when you see what MS pays for companies (and is offering for Facebook and consider the value of MySpace- the ultimate in local pages…. ) Marchex is a bargain.
I’d say that both Marchex and DBS wouldn’t be buying back stock unless something is up. That’s the something they lack that someone has to get them to realize their full potential.
btw, That movie is in production. Called webfather.com
I’d be buying stock in this company and watching it very carefully.
Read all the press and history on the site and think about the Verizon attacks on domainers and connect the dots.
http://ir.idearc.com/stockquote.cfm
Another way to look at local is that it has been under control of Yellow Pages and 411. They have the customers/relationships and market brand trust. They just need a 21st century model for success which they now have to buy.
What about MCHX + local.com?
They are in bed with local
http://ir.local.com/phoenix.zhtml?c=181515&p=irol-newsArticle&ID=970582&highlight=
Whole strategy is right here:
http://blog.searchenginewatch.com/blog/061019-080545
to succeed you need sales, print, direct mail, voice, mapping etc
http://www.idearcmedia.com/CammsServlet/pressrelease/625.pdf