FindWhat Diversifies
FindWhat has just acquired Miva Software, a company that provides sophisticated online shopping cart functionality. It's not clear what the strategy is here, although FindWhat's claim that it plans to "introduce Miva Merchant to its 25,000 advertisers" certainly has some merit as there is considerable overlap there.
More broadly it appears that FindWhat management has a plan to diversify its operations, perhaps realizing that its generous market valuation can't last forever, and that the third rung on the pay-per-click advertising ladder could prove shaky long term.
FindWhat's acquisition of European pay-per-click leader Espotting took us by surprise as well. But it won't surprise us in future if FindWhat gobbles up a few more low-priced private companies in the e-commerce field, perhaps even some with large customer lists that can be persuaded to become FindWhat advertisers (where the real money is).
A cynical view of the acquisitions might suggest that the Street likes them because they'll boost top line revenue next year, ensuring that FindWhat's rich valuation continues to seem plausible. For the next several quarters, the company should also continue to be profitable enough to maintain that plausibility with investors.
Posted by Andrew Goodman
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