Bankrate.com Financial Info [UPDATE]
I came across the latest Bankrate.com financial announcement, as it is a publicly-held company, and so freelancers can get a pretty good idea of how the business is doing. Here's the short view:
The acquisition also shows the value of intellectual property (IP) like copyright and why companies push so hard to own it. The IP because a major asset that is worth money. In this case, the Bankrate.com shareholders are going to get $28.50 a share in cash, or $571 million it total. Companies know damned well what they're asking for when they want articles under a WMFH basis. They're taking the value out of your pocket so they can put it in theirs. Don't forget that when you're negotiating price.
[Update: Check the comments on this post. One reader pointed out that according to the SEC documents about the deal, much of the cash on hand will go to fees incurred to conduct the deal. That would have some predictable ramifications for the time it will take to get paid.]
- This was for the second quarter of 2009.
- Overall revenue was down 23 percent, from $40.2 million to $31.0 million. Online revenue was down 23 percent to $29.0 million, which also shows that the bulk of its money -- 93.5 percent -- comes from online.
- Net income was down even more sharply, from $4.1 million to $1.9 million, or roughly 53.7 percent.
- Company CEO Thomas Evans blamed it on "macroeconomic conditions." Translated, it means that financial advertising, particularly in the banking, mortgage, and credit card channels, is still way off of normal. The question is whether this is the new normal.
- There is cash or cash equivalents of over $55 million and quarterly expenses run around $15 million. Normally you'd want to see a much bigger amount of money tucked away so the company could ride out longer than, say, a year, but there is still plenty of cash to pay people, so seeing delays in payment wouldn't be reasonable. (And to be clear, I'm not suggesting that anyone is reporting delayed payment. But it's good information to keep in your back pocket in any negotiation.)
The acquisition also shows the value of intellectual property (IP) like copyright and why companies push so hard to own it. The IP because a major asset that is worth money. In this case, the Bankrate.com shareholders are going to get $28.50 a share in cash, or $571 million it total. Companies know damned well what they're asking for when they want articles under a WMFH basis. They're taking the value out of your pocket so they can put it in theirs. Don't forget that when you're negotiating price.
[Update: Check the comments on this post. One reader pointed out that according to the SEC documents about the deal, much of the cash on hand will go to fees incurred to conduct the deal. That would have some predictable ramifications for the time it will take to get paid.]
Labels: finance, online, publishers
posted by Erik Sherman | 8:34 AM
4 Comments:
If you read the SEC documents closely, you'll see that of the $55 million in cash, about $40 million will be used by Apax to pay the fees associated with the acquisition.
I was doing a quick look at the financial press release and hadn't examined the acquisition in any depth - thanks for pointing this out. The upshot, to readers who might not know, is that suddenly there will be a lot less cash available in the corporate coffers -- far less than three month's worth of normal expenses -- suggesting that those doing work for the company may find payment terms being significantly stretched out going forward.
Erik, I write for websites owned by Bankrate.com, and it's business as usual. I'm writing more for them than before the sale, and I've been paid on time every time.
I don't know what will happen in the future, but I thought it would at least be worth pointing out.
Jen, any affect from the acquisition could be sometime out, and probably wouldn't happen before the transaction was final.
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