How did TheStreet.com (NSDQ: TSCM) manage to report a pretty solid quarter, in light of ad weakness and the market downdraft? CEO Tom Clarke chalked it up to the company’s efforts at diversifying its network, reducing its reliance on financial advertisers, expanding its subscription services (see: Nails on the Numbers, a stock options newsletter written by Lenny Dykstra) and growing its other services (Promotions.com). Going forward, expect more subscription newsletters, an investment into long-form video and a continued focus on acquisitions (prudent, of course). A couple of other stats from the intro:
– Ad Market: How did advertising hold up as it did? Clarke: “I think we said earlier in the quarter that we had not seen weakness in the categories that others have seen… the diversification that we’ve created around the category of money is really important when advertisers are looking at it. Non financial advertisers really want to go in front of the demos we have.” Outlook: “As we look out into the third quarter, we still think that the non-financial category will be strong for us.” He also noted the benefit of the Promotions.com deal in enticing advertisers. As for the financial advertisers, says CFO Eric Ashman: “We still feel very good about the financial advertisers on our site.” But growth is about the non-financials, and you can’t call a bottom.
– Deals: What is driving the company’s decision making on deals? Clarke: “Valuations. Public valuations are cheaper than private valuations… we’ve got things in our pipeline, but haven’t pulled the trigger due to valuation concerns.“
More after the jump.
– TheStreet Ad Net?: An analyst asks whether TheStreet.com might get into the vertical ad network game (The question feels very Q407). Clarke’s answer was unclear, saying it was something “In the front of our thought process” and that they already rep ads for Dividend.com and Bankaholic. Then he said the company was not comfortable doing it en masse, because TheStreet wants to focus on selling quality inventory: “You’re not going to see us add 20-30 (publishers) in any one quarter.” Then he added that that may change and that it will happen over time. Basically, it sounds like an ad network could emerge over time into a major business, but that the company has no plans to fling open the gates to all comers that want access to their salesforce.
– Video Strategy: Seeing more interest among audiences in long-form content. Because the company has video production infrastructure in place, the company has room to expand offerings without a huge increase in costs. More: Advertisers want opportunities to get their ads in front of users longer. It’s also possible that the company will experiment with a subscription model for video.
– Mainstreet: Clarke hasn’t changed his tune on the site, continuing to talk it up as key to the company’s long-term strategy and growth: “We love the content of Mainstreet.” Content-wise, it’s open as to what can go on it, unlike TheStreet.com, which is more limited towards investor news. No traffic numbers given out, but Clarke says it continues to grow.