Local.com Corp. (LOCM, Financial) filed Annual Report for the period ended 2011-12-31.
Local.com Corp has a market cap of $56.8 million; its shares were traded at around $2.6 with and P/S ratio of 0.7.
Cost of revenues expenses for the year ended December 31, 2011, increased by 6.0%, compared to the same period in 2010. The increase was primarily due to increased traffic acquisition costs associated with driving more consumers to our Local.com website. The increase in traffic acquisition cost was partially offset by a decrease in revenue share due to the decrease in network revenues. As a percent of revenue, cost of revenues increased to 62.6% for the year ended December 31, 2011, from 55.3% for the comparable prior year. The increase in cost of revenues as a percent of revenue was attributable to the increase in owned and operated revenue, with a lower margin than network revenue, which decreased during the 2011 year. The decrease in SAS revenues further contributed to the increase in cost of revenues as a percentage of revenue. This was partially offset by high margin revenue from one of our advertising partners. Lower margin is expected to continue through 2012.
Owned and operated revenue for the year ended December 31, 2010, increased 20.8% compared to the same period in 2009. O&O revenue is affected by fluctuations in traffic at our Local.com website as well as the effectiveness by which we are able to monetize such traffic. A measure of the monetization of the traffic on our flagship Local.com website is revenue per thousand visitors (RKV). RKV decreased to $237 for the year ended December 31, 2010, from $261 for the year ended December 31, 2009. The decrease in monetization was offset by an increase in traffic to the Local.com website in 2010. The increase in traffic at our website is the result of higher cost of revenues to attract users to our Local.com website as well as increased organic search traffic over
Network revenue for the year ended December 31, 2010, increased $13.1 million, or 108.5%, compared to the same period in 2009. The increase was primarily due to a $10.5 million increase in revenue related to our distribution network and the sale of Octane360 products, including domains and websites, of $3.7 million as part of a new revenue component of Network revenue, partially offset by an $802,000 decrease in revenue related to our local syndication network for the year. During the third quarter of 2009, we launched our distribution network, which distributes our advertising and content feeds to third-party websites. The increase in distribution network revenues is mainly due to the expansion of the distribution network being effective for the entire 2010 year. The decrease in local syndication network revenues is due to lower monetization of traffic on our network of over 1,000 regional media websites. The decrease in RPC due to the Yahoo/Bing alliance resulted in a decrease in revenue for us and our network partners which could in turn result in the loss of network partners in the future.
Cost of revenues expenses for the year ended December 31, 2010, increased by 37.0%, compared to the same period in 2009. The increase was primarily due to increased revenue share payments related to network partners and higher traffic acquisition costs associated with driving more consumers to our Local.com website. As a percent of revenue, cost of revenues declined to 55.3% for the year ended December 31, 2010, from 60.3% for the comparable prior year. The decline in cost of revenues as a percent of revenue was attributable to the high-margin revenue generated during the year ended December 31, 2010, from products related to the recently acquired Octane360 platform.
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Local.com Corp has a market cap of $56.8 million; its shares were traded at around $2.6 with and P/S ratio of 0.7.
Highlight of Business Operations:
Owned and operated revenue for the year ended December 31, 2011, increased 14.3% compared to the same period in 2010. O&O revenue is affected by fluctuations in traffic at our Local.com website as well as the effectiveness by which we are able to monetize such traffic. A measure of the monetization of the traffic on our flagship Local.com website is revenue per thousand visitors (RKV). RKV increased to $248 for the year ended December 31, 2011, from $237 for the year ended December 31, 2010. Traffic to the Local.com website also increased in 2011, compared to 2010. The increase in traffic at our website is the result of higher cost of revenues to attract users to our Local.com website as well as increased organic search traffic over the same period. On a year-to-date basis, the increase in RKV was a result of increased RPC in the third and fourth quarter due to a new advertising partner relationship. In addition, the companys third and fourth quarter financial results each included a net financial benefit of approximately $500,000 resulting from the modification of a partner contract. This financial benefit ended December 31, 2011. The increase was partially offset by lower RPCs experienced in the first and second quarters of the year. The decreased RPC, which began in the fourth quarter of 2010, and continued in the first and second quarter of 2011, was, in part, due to the Yahoo!/Bing alliance, which resulted in changes to the Yahoo! search and advertising platform. Also included in O&O revenue for 2011 is revenue from the newly acquired Krillion business.Cost of revenues expenses for the year ended December 31, 2011, increased by 6.0%, compared to the same period in 2010. The increase was primarily due to increased traffic acquisition costs associated with driving more consumers to our Local.com website. The increase in traffic acquisition cost was partially offset by a decrease in revenue share due to the decrease in network revenues. As a percent of revenue, cost of revenues increased to 62.6% for the year ended December 31, 2011, from 55.3% for the comparable prior year. The increase in cost of revenues as a percent of revenue was attributable to the increase in owned and operated revenue, with a lower margin than network revenue, which decreased during the 2011 year. The decrease in SAS revenues further contributed to the increase in cost of revenues as a percentage of revenue. This was partially offset by high margin revenue from one of our advertising partners. Lower margin is expected to continue through 2012.
Owned and operated revenue for the year ended December 31, 2010, increased 20.8% compared to the same period in 2009. O&O revenue is affected by fluctuations in traffic at our Local.com website as well as the effectiveness by which we are able to monetize such traffic. A measure of the monetization of the traffic on our flagship Local.com website is revenue per thousand visitors (RKV). RKV decreased to $237 for the year ended December 31, 2010, from $261 for the year ended December 31, 2009. The decrease in monetization was offset by an increase in traffic to the Local.com website in 2010. The increase in traffic at our website is the result of higher cost of revenues to attract users to our Local.com website as well as increased organic search traffic over
Network revenue for the year ended December 31, 2010, increased $13.1 million, or 108.5%, compared to the same period in 2009. The increase was primarily due to a $10.5 million increase in revenue related to our distribution network and the sale of Octane360 products, including domains and websites, of $3.7 million as part of a new revenue component of Network revenue, partially offset by an $802,000 decrease in revenue related to our local syndication network for the year. During the third quarter of 2009, we launched our distribution network, which distributes our advertising and content feeds to third-party websites. The increase in distribution network revenues is mainly due to the expansion of the distribution network being effective for the entire 2010 year. The decrease in local syndication network revenues is due to lower monetization of traffic on our network of over 1,000 regional media websites. The decrease in RPC due to the Yahoo/Bing alliance resulted in a decrease in revenue for us and our network partners which could in turn result in the loss of network partners in the future.
Cost of revenues expenses for the year ended December 31, 2010, increased by 37.0%, compared to the same period in 2009. The increase was primarily due to increased revenue share payments related to network partners and higher traffic acquisition costs associated with driving more consumers to our Local.com website. As a percent of revenue, cost of revenues declined to 55.3% for the year ended December 31, 2010, from 60.3% for the comparable prior year. The decline in cost of revenues as a percent of revenue was attributable to the high-margin revenue generated during the year ended December 31, 2010, from products related to the recently acquired Octane360 platform.
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