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Idealab-Backed Holding Firm Internet Brands Files For $100 Million IPO

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Internet Brands, the online media, e-commerce and community holding company based in El Segundo, CA, has filed for a $100 million IPO on Nasdaq. The full S-1 document is here.
The company was founded in 1998 as and, reflecting its growth and diversification, changed its name in 2005…it is a subsidiary of Idealab. Credit Suisse and Thomas Weisel Partners are underwriting the IPO, though no other details on number of shares or pricing was disclosed yet. It also did not reveal a symbol for its listed stock, which is a bit unusual.

The company recently bought and the bulletin board software service vBulletin.

The company had revenues of $85 million in 2006..its Q107 revenues declined to $19.1 million, compared to $21.9 million in Q106, “primarily as a result of a sequential decline in revenues in the consumer Internet segment over the last five quarters…In particular, our automobile-related websites have experienced significant revenue declines in recent periods,” says its S-1.

Also, the company is built on vertical acquisitions: “In the first six months of 2007, we have acquired 29 websites.” Investors include Idealab 9largest shareholder), Foundation Capital, Clearstone Venture Partners and others.

4 Responses to “Idealab-Backed Holding Firm Internet Brands Files For $100 Million IPO”

  1. Two things – with the release of the expected numbers, INET is expecting to collect over 100M from this IPO. Technically speaking, they don't need the money as they are already profitable through a number of revenue generating devices. They are at once, an advertising network of their own, leveraging over 25M unique visits per month. Additionally another major part of their revenue stream comes through their relationships with the various vendors that benefit through their sites. I know this specifically for CarsDirect.

    CarsDirect does collect monies from the dealers that are signed to their network. These dealers provide the vehicles that the shoppers on the site request. The larger dealers clearly source more vehicles and are therefore likely to be paying more to CarsDirect. I won't speculate that this come close to the potential ad revenue (which could be anywhere from $35-$75/cpm) but certainly it should not be overlooked.

    As for the idealab relationship, I find that it's very easy to take pot shots at a leader. idealab certainly made mistakes, however the cushion that they had to fall back on was substantial. As for counting them out – that would be extremely foolish.

    The business model of Internet Brands, as an advertising network is fantastic. They have a corner on two very exclusive niche markets – and are approaching a corner on a third.

    In the future – I would expect that the company will be producing more broadcast type material to compete head-to-head for additional ad dollars from the ipod generations.

    For my money – I see Internet Brands as a BARGAIN new BLUE CHIP stock.

    Definitely a buy.

    The predicted opening for their ipo as of 10/30/07 is $10-12. My expectation is above a $20 close on the day.

  2. I don't agree that Internet Brands is a domain holding company. It appears to me that they are aggregating sites with decent traffic but, on a stand-alone basis, do not have the ability to sell advertising. By tying these sites together, they can leverage their advertising network.

  3. One thing your piece leaves out is that this is essentially a domain holding company. We're increasingly seeing domaining emerging as a very viable business model. The Internet Brands properties would be worth far less, IMHO, if they had web 2.0 meaningless domain names.
    Didn't a lot of people write off IdeaLab after the dotbomb? I guess that was premature!