Want to Buy a Piece of Banks.com for 50 cents?

May 03 2010

bnxThere are a lot of publicly traded companies that own top generic keyword domains but there aren’t very many top generic keyword domains that are publicly traded.  The name banks.com is one.  Their names banks.com and looks.com alone are worth millions but you can have the entire company for only $13.8 million or just a small piece of a top domain for just 50 cents.  That’s the market capitalization for Banks.com or BNX.

At first glance the site is pretty plain.  A bad logo and a wordpress type layout doesn’t give you the impression that the site is properly optimized.  But there is more to the company that just banks.com According to their profile

We operate an Internet media property that provides targeted online advertising and services in the financial services sector. In November 2007, we changed our name to Banks.com, Inc. in connection with our decision to focus on becoming a leading provider of targeted traffic in the financial services vertical of online advertising. We intend to continue building a cohesive business around our flagship domain property banks.com. Through this web property, we provide access to current financial content, including financial news, business articles, interest-rate tables, stock quotes, stock tracking and financial calculators. We also provide users access to online financial services including: tax preparation and stock brokerage. We believe that focusing our content and services in the high-traffic financial services vertical will allow us to provide our advertisers operating in that vertical access to highly relevant traffic. In addition to banks.com, we operate other proprietary websites including look.com and searchexplorer.com. We generate revenue on these sites primarily via traffic generation and search engine marketing efforts. We also provide Internet technology professional services to Fortune 500 and other companies operating in the financial services sector.

So lets go to look.com as well.  Celebrity matching?  Again doesn’t seem fully optimized for such a strong domain name. A quick glance at  the numbers for 2009 show us

Revenue $11,000,000

Profit.  $256,000

I think that the $11 million in revenue is pretty impressive but two things stand out for me on their annuals results.  One, the interest expense is over $1 million a year  and two, they run super heavy with general and administrative expenses of $4 million.  I am also impressed how little they spend on traffic acquisition which tends to be under $1 million ever year. Overall I think that BNX shows the power of a category killer domain name.  It’s hard to argue that a domain is not being properly utilized when it’s raking in $11 million , but I do think they could do better.  Evidently stockholders think they will as the stock is up 230% since November.  The P/E of 58 seems a little high but with earnings coming out in May the stock price may be waiting for confirmation. It could also be a bit high waiting for a buyout of such strong names.  I’ll be waiting fon the sidelines until I see the next earnings report.

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Outsmarting the Dumb, Outworking the Smart

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1 comment

  1. Mark Jeftovic

    Their cost of traffic acquisition is actually 4.3M, and is carried on their statement as the Cost-of-Goods-Sold, not as Sales & Marketing.

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