Earnings: TheKnot’s Q2 Profits Up; Knot Vs WeddingChannel; Buying Lilaguides For $2 Million

TheKnot, the wedding and lifestyle media company and website, has reported its Q2 numbers today, and its profits rose to $3.8 million, compared to $1.3 million, in the year-ago period. Revenues were up 31 percent to $17.7 million from $13.6 million in the year-ago quarter.
Online advertising revenues were up 38% over the prior year. Publishing and other revenues rose by 30% and merchandise revenue increased by 20% over the prior year.
Earlier in Q2, it announced it is buying its rival WeddingChannel, for up to $79 million.
From the conference call transcript: There were some worries among analysts about how the integration between TheKnot and WeddingChannel would happen, so in the earnings call CEO David Liu explained it in detail: “The largest revenue source for us is advertising (70%) and sponsorships. WeddingChannel’s single largest source of revenue comes from commissions of registry gift purchases they handle for their retail partners. To put this into perspective, registry-related revenue for us in 2005 represented less than 1% of our total revenue. There is little overlap between our two businesses from either a revenue or an audience standpoint. In the first four months of the year according to the Nielsen ratings, the average percentage of traffic that overlapped was less than 20%. So while the merger’s not a consolidation of the industry, it does represent an aggregation of the online bridal audience….We do not plan to combine the web sites. Instead, we plan to run both brands at separate destinations and to continue to build out the key advantages for both brands.”
Also, earlier this week, the company bought Lilaguides, a collection of pocket-sized local guidebooks for first-time parents, making an expansion into the parenting world. The guides operate like Zagat Survey restaurant guides, offer personal reviews on 32,000 businesses that cater to new parents in 23 cities nationwide, including New York, Washington D.C., and Miami. From the call: “Lilaguides currently has a small revenue stream from the sale of the physical guides. It is our intention to develop an online publishing platform and once traffic [develops] we would charge local vendors for premium listings. We would also begin to sell national advertising on the site, and the site should also expand the e-commerce opportunity for us in the baby market.”
Earnings Release | Webcast of conference call |

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