Internet Brands IPO May Mark Return to Normalcy

That's too bad, because another one of Internet Brands' key areas, homebuying and homeownership, is going through its own slowdown. Consumers just aren't rushing to sites like Loans.com and Mortgage101.com. And that's not likely to change for a while.

Amid the slower revenue, Internet Brands hasn't kept costs down. Costs of revenue grew to 29% of total revenue in the nine months through Sept. 30, up from 25% a year ago. And general and administrative costs (led by stock-based compensation) jumped to 34.5% of revenue from 25.5%. Both of those results contributed to the swing to a loss of 14 cents a share in the nine-month period, against a 33-cent-a-share profit a year earlier.

Investors in the IPO seemed to like the steady track record that Internet Brands has built up over the years. But there are some unsettling trends showing up in 2007. So it's understandable that the company went public but received the cold welcome that it did.

That's not great news for Internet Brands. But if it means that Wall Street is starting to be judicious again about valuing IPOs in general, that's good news all around.