Internet Brands IPO May Mark Return to Normalcy

11/26/07 - 05:56 AM EST

Kevin Kelleher

Internet Brands is Barry Diller's IAC/InterActiveCorp writ small -- a collection of online brands specializing in specific needs and services. But while Diller is making plans to break up IAC into a group of more focused and distinct brands, Internet Brands is intent on keeping its family together under the roof of a single public company.

Unlike a lot of Internet portals and giants, the sites operated by Internet Brands aren't a stew of far-flung properties, but focused on e-commerce, classifieds and online communities. And most are grouped in targeted topics: automobiles, travel and homeownership. Some of the sites include CarsDirect.com, MustangForums.com, BBOnline.com, WikiTravel.org and DoitYourself.com.

Few of these sites are likely to show up on a Top 100 sites list by themselves. But as a group they have provided Internet Brands with steady and impressive growth.

Between 2004 and 2006, the company's revenue grew to $84.8 million from $61.1 million, while its profit expanded to $38.8 million from $2.9 million.

Normally, this kind of financial performance would cause an IPO to be greeted with open arms, but as is often the case, there's a catch -- and it came this year.

For the first nine months of 2007, revenue totaled $65 million, down 0.3% from the same period in 2006, largely because of a slowdown in advertising by automobile clients. "The automotive industry has generally been in a downward cycle beginning in the second half of 2006," the company said in its prospectus.

Your Recent Quotes: Quote Up0 | Quote Down0
 
Dow S&P 500 NASDAQ
Oil*
65.43
8,280.74
896.42
1,796.52
10 Yr
3.50%
223.32
26.91
49.20
-2.63%
-2.91%
-2.67%
Data delayed 20 min
Get Jim Cramer's Free Newsletter

The Daily Booyah!
Get your daily dose of Cramer in your inbox.
Submit
We respect your privacy.

Premium Stock Ideas
Access Action Alerts Plus to find out Cramer's latest picks now!

Brokerage Partners