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ECommerce On The Rise
By WebProNews
Staff Writer
Article Date: 2004-10-04
The recent rise in eCommerce is fueled by online shoppers with investors chasing those revival traits as a new boom lies on the horizon.
eBay expects online eCommerce in China to double every year for the next four years and though Asia is fueling much of the eCommerce speculation by investors most online businesses are seeing improved sales figures.
iMergent said its fourth quarter results showed an 82% rise in revenue. The Orem, Utah-based company reported sales of $25 million for the period ending June 30, 2004, versus $13.7 million for the same period last year. iMergent credited the tremendous rise in revenue to a significant rise in international sales.
iMergent president Brandon Lewis was quoted in a Sept. 8 press release as saying, "During fiscal 2004, our record revenue and earnings prove we have successfully executed our strategic plan to grow the business and increase operating leverage."
With Google having "crossed over" to the world of Wall Street, joining its peers, Yahoo! and MSN, the search engine admittedly derives 98% of its income in the form of eCommerce.
Google, whose IPO was done by auction, where the investors choose the amount they're willing to pay for stock, is flush with cash and looking to expand its eCommerce role online.
Google has given no indication of what that expansion entails.
In a March story covering the US Commerce Departments figures on domestic eCommerce, AXcess News covered a micro cap stock that's been outperforming its peers, even beating Yahoo and Google in P/E ratios; Communicate.com. At the time of that story CMNN shares were trading at 41 cents. Friday, its closing price was 61 cents.
The company's focus has been one-word domains, such as perfume.com, boxing.com, canadian.com and importers.com that collectively drive 1 million viewers per month to those sites.
At the time, Communicate.com's net revenues were $178,042 for the nine months ended September 30, 2003, compared to $147,544 for the same period in 2002. Not much to crow about, but its unique Web properties have been paying off and current results are so impressive it warranted a closer look.
Friday, Communicate.com announced the final payment ($200,000) of a $1 million sale of four one-word domains; Automobile.com, Exercise.com, Call.com and Makeup.com. The price tag includes a 5 percent royalty on all four domains.
In mid-August, Communicate.com released its second quarter results, reporting $733,107 in revenue for the 2nd quarter compared to $173,895 for the same period in 2003, an increase of 320%. Its period ending was June 30.
For the second half, CMNN came in with even more impressive results, reporting revenues of $1,229,216 compared to $255,052 for the same period in 2003, an increase of 380%.
In both the 2nd quarter and six months ending period, Communicate.com showed extraordinary earnings having booked net income of $120,908 for the quarter compared to $27,801 for the same period in 2003, an increase of 330%. For the six months ended June 30, 2004, the company reported net income of $166,095, compared to $33,671 for the same period in 2003, an increase of 390%.
The company reported earnings per share of 1 cent for the quarter and six months ended June 30, 2004. It also appears to be undervalued.
According to Sept. 13, 2004, figures on Yahoo! financial, the price to earnings ratio comparisons of CMNN's peers were, Communicate.com: 13.67, Google: 152.21, Yahoo!: 131.06 and Travelzoo: 375.80.
Travelzoo, Inc. is a direct competitor to Commmunicate.com's travel domains, an area that CMNN has concentrated on developing.
Motley Fool's Tim Beyers said in a story released Friday, "Investing can be a wholly enriching experience if taken seriously. And sometimes even if not, as witnessed by those who bet early on Travelzoo with nothing more than a brokerage account and a prayer." Though it was unclear whether Beyers was complimenting the stock or saying he regretted not getting in on it earlier.
Orbitz, Inc. is another eCommerce travel business whose shares have been performing well after closing up Friday 10 cents to close at $27.30, closer to its 52-week high of $30.75 set when Cendant Corp. announced that it was buying Orbitz for $27.50 a share in September.
The nearest undervalued competitor of Communicate.com is Priceline.com, Inc., which has a price to earnings ratio of 19.36. Forbes covered Priceline in a story last week as a "top pick in travel stocks," according to Standard & Poor's. Though the article overlooks stocks like Communicate.com's, which is not covered by S&P.
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