FindWhat Tells Investors Madison Avenue May No Longer Find Its Key Ad Metrics

by Paul Gough, Oct 20, 2003, 12:00 AM

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A performance-based Web marketing company announced Monday that it no longer wants to have its own performance measured via click-throughs.

FindWhat.com told Wall Street analysts that it had stopped its tradition of reporting active advertiser accounts, paid click-throughs and average revenue per click-through. Executives said it was because FindWhat.com's business was changing with the possible acquisition of a company that has small- and medium-sized e-commerce clients and a deal with Mitsui that would give it a foothold in click-through advertising in Japan but skew its click-through results.

"As our business continues to mature, and we pursue additional revenue streams, we feel our historical key metrics are less indicative of the direction of our business than they have been in the past," said Phillip Thune, chief operating officer of FindWhat.com. Thune thinks revenues and profits are better indicators of performance.

Thune said the deal with Mitsui would increase the mix of lower-revenue click-throughs, lowering FindWhat.com's average revenue per click-through. The same could be said about the possible acquisition of Miva Corp., an e-commerce company that serves small- to medium-sized businesses and would bring FindWhat.com's client list to about 100,000 advertisers. Some of the advertisers would be on a pay-per-click basis and others would not, executives said.

Neither deal has been completed yet, so the data in question wouldn't be affected in the third quarter. In the second quarter, FindWhat.com reported 98.4 million paid click-throughs compared to 54.2 million during the same period a year ago. It had 24,500 active advertisers in the second quarter compared to 17,100 accounts a year ago. Thune said the third-quarter numbers, while he declined to disclose them, weren't much different from expectations.

"We are not discontinuing the reporting of key metrics because we fared poorly in 2003," Thune said. It's just not indicative of where FindWhat.com's business is tracking, executives said.

Craig Pisaris-Henderson, chairman and chief executive officer, said that the numbers didn't move much but said it would be a fair assumption to say it wasn't a huge increase in top-line revenue. "Those measures did not move very much," Pisaris-Henderson. "None the less, in terms of getting specific, we're just not going to do it anymore."

Revenues increased 62 percent to $17.8 million in the third quarter, a record. FindWhat.com anticipates revenue in 2003 to reach $70 million, 64 percent more than the $42.8 million recorded in 2002. Based on acquisitions and other deals still pending, FindWhat.com declined to make revenue and other predictions for 2004.

"We are waiting for more clarity, particularly on Espotting," said Thune.

In September, FindWhat.com said it was renegotiating a proposed merger with Espotting Media Inc., a British paid-placement service that it had announced three months earlier. FindWhat.com said at the time that it would review financial results before deciding what to do about the merger. Both Thune and Pisaris-Henderson said FindWhat.com was looking for new terms in the merger and noted it was possible the two companies would not merge. A decision could come as soon as the end of the year, FindWhat.com said.

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