March 28, 2005
Growth In Online Ad Revenue
IAC'S offer of $1.9 billion in stock for a search business that ranks a distant fifth worldwide raises the question: Are these second-tier companies worth all this loot? The answer is a qualified yes. While About.com commanded 23 times this year's expected cash flow, and Jeeves went for about 20 times this year's expected profits, analysts point to strong growth in the online ad market as justification for the lofty tabs. Indeed, the Interactive Advertising Bureau expects Web ad revenue to rise 20%, to $11.5 billion, this year.
Why Second-Tier Sites May Be Worth Top Dollar [BusinessWeek]
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