I've been using Blogger since 2004. As a basic blogging platform, it works. But when I read yet another account of spammers taking over the service, it made my blood boil. The problem isn't just that Google has failed to put all of the security and anti-spam pieces together. No, what really bothers me is Google has neglected Blogger for years, while concentrating its efforts on newer acquisitions and higher-profile services, such as Google Maps.Blogger captcha
That's not to say Google hasn't allocated resources to Blogger. You can see on Blogger Buzz that the team is still plugging away at bug fixes, and even finds time to organize a party at SXSWi. But when it comes to security, spam blogs, and fixing other issues that have bedeviled users for years, the pace of change is glacial. For instance, Blogger is just now rolling out a feature that lets bloggers publish in the future. The lack of this basic feature isn't just an irritant to power users -- it actually hurts Blogger, and Google, because many new and existing users have turned to Wordpress and other services to find it.
I -- and others -- don't hold out much hope for Google. Even though Blogger is used by millions, the company clearly has more important priorities. And, thanks to the popularity of Google's AdSense service among spammers, the company has an incentive not to clamp down too hard.
29 Nisan 2008 Salı
Google accused of deception in selling AdSense keyword ads
NEW YORK (AP) — An advertiser sued Google Inc. in federal court Tuesday claiming the company deceived him and charged for ads displayed on third-party Web sites, even though he left blank an "optional" box that seemed to address the issue.
The dispute is over Google's popular AdSense program, which targets ads to keywords in articles and other content at participating sites. The program complements the traditional AdWords program, which runs targeted ads alongside Google's search results. Ads under both programs generate the bulk of Google's revenues.
The lawsuit accuses Google of defrauding advertisers out of millions of dollars collectively by "redefining the universally understood meaning of an input form left blank."
The plaintiff in the case, David Almeida, had signed up for Google ads to promote his private investigation business in Massachusetts. Because he did not want to buy AdSense ads, Almeida said he left the maximum per-click bid blank, believing "optional" meant he could opt out of the AdSense program by doing so.
Instead, it turned out the AdWords bid applied when he did not exercise that option, and he should have put "zero" into the box to opt out, said his attorney, Brian Kabateck.
"Most of the customers that actually fall victim to this scam are the unsophisticated advertisers," Kabateck said. "The sophisticated advertisers will know better, will know how to do it. These are the little guys that don't have money to lose on a program like this."
Google declined comment, saying it had not yet received the complaint.
The lawsuit was filed in U.S. District Court in San Jose, Calif., by Kabateck, Brown and Kellner, a law firm that has frequently filed consumer-protection lawsuits that seek multimillion dollar judgments or settlements. The lawsuit seeks unspecified damages and class-action status.
Kabateck estimated the unwanted advertising involved brings hundreds of millions of dollars in revenue to Google, though he could not immediately say how much Almeida specifically lost.
Kabateck has tussled with Google before and ultimately joined in a $90 million settlement in 2006 over "click fraud," in which merchants are billed for fruitless traffic generated by someone who repeatedly clicks on an advertiser's Web link with no intention of ever buying anything.
Kabateck also reached a multimillion dollar settlement with Yahoo Inc. over similar complaints.
The dispute is over Google's popular AdSense program, which targets ads to keywords in articles and other content at participating sites. The program complements the traditional AdWords program, which runs targeted ads alongside Google's search results. Ads under both programs generate the bulk of Google's revenues.
The lawsuit accuses Google of defrauding advertisers out of millions of dollars collectively by "redefining the universally understood meaning of an input form left blank."
The plaintiff in the case, David Almeida, had signed up for Google ads to promote his private investigation business in Massachusetts. Because he did not want to buy AdSense ads, Almeida said he left the maximum per-click bid blank, believing "optional" meant he could opt out of the AdSense program by doing so.
Instead, it turned out the AdWords bid applied when he did not exercise that option, and he should have put "zero" into the box to opt out, said his attorney, Brian Kabateck.
"Most of the customers that actually fall victim to this scam are the unsophisticated advertisers," Kabateck said. "The sophisticated advertisers will know better, will know how to do it. These are the little guys that don't have money to lose on a program like this."
Google declined comment, saying it had not yet received the complaint.
The lawsuit was filed in U.S. District Court in San Jose, Calif., by Kabateck, Brown and Kellner, a law firm that has frequently filed consumer-protection lawsuits that seek multimillion dollar judgments or settlements. The lawsuit seeks unspecified damages and class-action status.
Kabateck estimated the unwanted advertising involved brings hundreds of millions of dollars in revenue to Google, though he could not immediately say how much Almeida specifically lost.
Kabateck has tussled with Google before and ultimately joined in a $90 million settlement in 2006 over "click fraud," in which merchants are billed for fruitless traffic generated by someone who repeatedly clicks on an advertiser's Web link with no intention of ever buying anything.
Kabateck also reached a multimillion dollar settlement with Yahoo Inc. over similar complaints.
Google Brings Banner Ads In Your Pocket
ImageSan Francisco -- Google Inc. said on Wednesday it is shaping out its portion of the mobile advertising market, has unveiled brand-image ads for mobile phones, in a bid to extend beyond the computer-based Web market, joining Yahoo, AOL, MSN and a host of niche players scrambling toward the next frontier in interactive advertising on phones.
While mobile advertising is nothing new, Google’s main center of attention on this latest platform for display ads is building up excitement in some circles. A complement to Google’s existing mobile text ads that it sells through its cost-per-click AdSense program, which it is now growing enormously to offer contextually targeted graphical banners, formatted to fit within the constraints of the mobile browser.
“Image ads are in reality attractive to brand advertisers,” Sanjay Agarwal, a mobile ad engineer with Google, said in a video describing the product. “We want to give them the flexibility of either choosing a text format or an image format.”
The service, “Mobile Ads,” can also be coupled with AdSense and similar to other Google products will use keyword targeting to display relevant advertising for users. The requirement is that advertising should be linked to a mobile Web page, according to a blog post by Alexandra Kenin, the product marketing manager for Mobile Ads.
Google co-founder Sergey Brin even said at Google’s recent quarterly results conference call that “The mobile ads work very well ... there is nothing to dissuade me it would be any worse than traditional desktop search.” If that holds true -- and we all know how desktop search has panned out -- mobile search may be a huge blockbuster.
With many new carriers now offering flat-rate faster data plans with new smartphones shipments are increasing, and attention to the mobile web has gained a huge amount of steam due to the iPhone and its full web browsing capabilities to perform more functions of the traditional computer, Google has lately been evangelizing the prospects for the mobile Web.
“Though, only one image ad is displayed on each mobile page, a move that appears to restrict clutter on small screens.”
By collectively connecting Mobile Ads and AdSense, publishers can automate the advertising delivery services to serve the advertisements that have generated the highest click-through rates.
“For publishers, mobile image ads provide added flexibility,” Kenin wrote. “They can now choose to show text ads, image ads, or a mix of both and Google will dynamically return the ad that we expect will perform best at the time the ad is shown.”
Google’s penetration into the mobile display advertising business comes as the development of mobile advertising continues skyrocketing. Today’s market is still in the emerging phase, but recent research has suggested that mobile browser deployment will grow dramatically over the next five years, even if consumer usage of the new capabilities remains uncertain.
Spending on mobile advertising is expected to reach US$1.3 billion this year, according to JuniperResearch. Although SMS messaging carries on to dominate most campaigns, video-related services and multi-media displays are expected to be the primary driving force in the near future.
For advertisers, the procedure of Google’s display ads for mobile work in a similar fashion as banner ads on the Web, with a few twitches for the mobile medium. Advertisers put forward their image ads to Google, which will then place them on publishers who take part in Google’s mobile content ad network and have optimized their sites for the mobile browser.
Google will offer advertisers four ad sizes from which to choose, none with a file size larger than 3 kilobytes. The company is attempting to keep file sizes small, so that the ads do not unduly slow the load times of mobile Web pages, Agarwal said. Slow speeds have been a common complaint about the experience of browsing the Web on a mobile device.
Once Google’s Android operating system starts shipping and the mobile web is a single button press away, Google’s next frontier to attack will be the mobile search market. And, of course, selling display ads along with all those searches.
“Google now joins other industry heavyweights -- such as AOL and Yahoo -- chasing the mobile display advertising dollars.”
Mobile image ads are available in 13 national markets: Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Russia, Spain, the UK, and the United States, Google said.
While mobile advertising is nothing new, Google’s main center of attention on this latest platform for display ads is building up excitement in some circles. A complement to Google’s existing mobile text ads that it sells through its cost-per-click AdSense program, which it is now growing enormously to offer contextually targeted graphical banners, formatted to fit within the constraints of the mobile browser.
“Image ads are in reality attractive to brand advertisers,” Sanjay Agarwal, a mobile ad engineer with Google, said in a video describing the product. “We want to give them the flexibility of either choosing a text format or an image format.”
The service, “Mobile Ads,” can also be coupled with AdSense and similar to other Google products will use keyword targeting to display relevant advertising for users. The requirement is that advertising should be linked to a mobile Web page, according to a blog post by Alexandra Kenin, the product marketing manager for Mobile Ads.
Google co-founder Sergey Brin even said at Google’s recent quarterly results conference call that “The mobile ads work very well ... there is nothing to dissuade me it would be any worse than traditional desktop search.” If that holds true -- and we all know how desktop search has panned out -- mobile search may be a huge blockbuster.
With many new carriers now offering flat-rate faster data plans with new smartphones shipments are increasing, and attention to the mobile web has gained a huge amount of steam due to the iPhone and its full web browsing capabilities to perform more functions of the traditional computer, Google has lately been evangelizing the prospects for the mobile Web.
“Though, only one image ad is displayed on each mobile page, a move that appears to restrict clutter on small screens.”
By collectively connecting Mobile Ads and AdSense, publishers can automate the advertising delivery services to serve the advertisements that have generated the highest click-through rates.
“For publishers, mobile image ads provide added flexibility,” Kenin wrote. “They can now choose to show text ads, image ads, or a mix of both and Google will dynamically return the ad that we expect will perform best at the time the ad is shown.”
Google’s penetration into the mobile display advertising business comes as the development of mobile advertising continues skyrocketing. Today’s market is still in the emerging phase, but recent research has suggested that mobile browser deployment will grow dramatically over the next five years, even if consumer usage of the new capabilities remains uncertain.
Spending on mobile advertising is expected to reach US$1.3 billion this year, according to JuniperResearch. Although SMS messaging carries on to dominate most campaigns, video-related services and multi-media displays are expected to be the primary driving force in the near future.
For advertisers, the procedure of Google’s display ads for mobile work in a similar fashion as banner ads on the Web, with a few twitches for the mobile medium. Advertisers put forward their image ads to Google, which will then place them on publishers who take part in Google’s mobile content ad network and have optimized their sites for the mobile browser.
Google will offer advertisers four ad sizes from which to choose, none with a file size larger than 3 kilobytes. The company is attempting to keep file sizes small, so that the ads do not unduly slow the load times of mobile Web pages, Agarwal said. Slow speeds have been a common complaint about the experience of browsing the Web on a mobile device.
Once Google’s Android operating system starts shipping and the mobile web is a single button press away, Google’s next frontier to attack will be the mobile search market. And, of course, selling display ads along with all those searches.
“Google now joins other industry heavyweights -- such as AOL and Yahoo -- chasing the mobile display advertising dollars.”
Mobile image ads are available in 13 national markets: Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Russia, Spain, the UK, and the United States, Google said.
Google, Champion of Small Biz on Capitol Hill
Please don't stifle online advertising! That was Google's plea during last week's House Committee on Small Business hearing on "The Role of Small Businesses in Stimulating the Economy." The company's VP Online Sales and Operations David Fischer spoke to lawmakers, stressing the benefits of Google AdSense to small Web site publishers, bloggers and educators.
Sure, most of them make very little off their AdSense ads. Rather than providing a range of incomes the more successful small businesses garner from AdSense ads, Google chose to focus on the obvious outlier. According to Fischer, Ohio-based AsktheBuilder.com collects an average of $42,000 each month from the ads.
He went on to say some 2,000 businesses based in the first district of Ohio earned $1.6 million in total last year through AdSense. It just so happens Republican Congressman Steve Chabot is a ranking member of the committee and represents that district.
Fischer ended his speech by petitioning members to think twice about proposing laws that could affect small businesspeople online. "As the committee continues its important work as a champion of small business I would encourage you to constantly consider how any new laws and regulations will affect these online entrepreneurs," he said.
26 Nisan 2008 Cumartesi
Google Display Ads in Your Pocket
With the launch of display ads for mobile Web sites, Google (NASDAQ: GOOG) joins Yahoo, AOL, MSN and a host of niche players scrambling toward the next frontier in interactive advertising.
Google has already been selling mobile text ads through its cost-per-click AdSense program, which it is now expanding to offer contextually targeted graphical banners, formatted to fit within the constraints of the mobile browser.
"Image ads are really attractive to brand advertisers," Sanjay Agarwal, a mobile ad engineer with Google, said in a video describing the product. "We want to give them the flexibility of either choosing a text format or an image format."
With more carriers moving to flat-rate data plans and new smartphones able to perform more functions of the traditional computer, Google has lately been evangelizing the prospects for the mobile Web.
Today's market is still nascent, but recent research has suggested that mobile browser deployment will grow dramatically over the next five years, even if consumer usage of the new capabilities remains uncertain.
Nevertheless, Apple's (NASDAQ: AAPL) iPhone has shown that with a decent screen size and intuitive navigation, U.S. consumers will use their phones for activities other than talk and text messaging. Google is hoping that efforts such as its own Android initiative will lead to a new generation of handheld devices that help the mobile Web live up to its promise.
Mobile advertising in particular holds a great deal of promise, at least according to industry watchers.
JupiterResearch analyst Neal Strother concurs with Google's claim that mobile display ads have a higher clickthrough rate than Web display ads. A clickthrough rate of 5 percent to 6 percent for mobile ads is common, Strother said, whereas a 3 percent clickthough rate for online display ads is very high.
Part of that success for mobile ads could relate to the novelty of the format, Strother suggested. As people grow more accustomed to seeing ads on mobile Web pages, clickthroughs will decline, the argument goes.
Just as the size of the consumer segment reachable through mobile ads is small, but growing, so too is the proportion of advertisers leveraging the medium.
Over the past year, Jupiter estimates that fewer than one-fifth of all companies created any type of mobile advertising. The firm projects that in the next year, 34 percent will be advertising on mobile devices, but of those, more will engage in some kind of texting campaign than search or display advertising.
While "some of the bigger brands have made some serious commitments to mobile," Strather said that the tendency among advertisers is to make mobile a microcosm of an aggregate digital budget, or to treat mobile advertising as an experimental expense.
"Very few companies on the advertising side have made mobile a standalone item on a line-item budget," Strother told InternetNews.com.
For advertisers, the mechanics of Google's display ads for mobile work in a similar fashion as banner ads on the Web, with a few tweaks for the mobile medium. Advertisers submit their image ads to Google, which will then place them on publishers who participate in Google's mobile content ad network and have optimized their sites for the mobile browser.
Google will offer advertisers four ad sizes from which to choose, none with a file size larger than 3 kilobytes. The company is trying to keep file sizes small, so that the ads do not unduly slow the load times of mobile Web pages, Agarwal said. Slow speeds have been a common complaint about the experience of browsing the Web on a mobile device.
Google also said it will only show one display ad per page.
Google AdSense adds images to mobile ads
Google AdSense's mobile division announced the launch of mobile image ads, which are still priced on a cost-per-click basis, yet can also serve as a branding tool for advertisers. Apparently, they have shown to have good click-through rates.
Interested mobile publishers will need to update their AdSense code to start displaying mobile ads with images on their site. As for the supported banner sizes, four dimensions are included in the mix: 305×64, 215×34, 192×53, and 167×30 pixels.
Mobile image ads are currently available in Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Russia, Spain, the UK, and the US.
What follows after the jump is the short interview with Google's mobile ads engineer Sanjay Agarwal and his demo. Enjoy!
Google To Stuff Images Into Mobile Phone Ads
Google has decided that cell phones and the mobile Web are ready to display ads with images embedded in them. It announced the new program yesterday, whereby at least one ad per mobile page will have a graphic image. About time, or will it clutter mobile Web pages?
For now, the images will be limited to brands, and not actual products or other pictures. Google says that the mobile image ads will all be targeted by keywords, and are priced on a cost-per-click basis. They also have to link to a mobile (not a standard) Web page.
Google believes the program will be good for advertisers. Alexandra Kenin, a product marketing manager for Google Mobile Ads, wrote in a blog post, "For advertisers, mobile image ads serve as a branding tool and have shown to have good clickthrough rates. Advertisers using mobile image ads will also benefit because we only show one image ad per mobile page. For publishers, mobile image ads provide added flexibility. They can now choose to show text ads, image ads, or a mix of both and Google will dynamically return the ad that we expect will perform best at the time the ad is shown. Publishers who are already using AdSense for mobile content just need to update their AdSense code to start displaying mobile ads on their site."
Google also claims that this will be good for those searching the mobile Web, as it will provide a different way to interact with mobile content. Because the ads are targeted by keyword, users won't be slammed with ads for things that are irrelevant to them. It also claims that it won't gum up or slow down browsing the mobile Web, which we all know is still not a perfect experience to begin with.
"The mobile ads work very well," said Google co-founder Sergey Brin. "There's nothing to dissuade me it would be any worse than traditional desktop search."
I've poked around a number of Web sites with my mobile phones this morning and have yet to see any images appear in the Google ads served on those pages. Same goes for search results. Users of AdSense appear to have not gotten the message yet that they can activate this functionality.
I've seen branded images appear on mobile Web pages served by Yahoo. They weren't overly intrusive, but they do take up screen real estate. I don't mind advertisements on standard Web pages as viewed on my desktop. Having a 19-inch screen means I have plenty of room for content. Mobile devices are different. When you only have 2 to 3 inches of screen to look at, adding ads (examples here) will force users to scroll around more to get to the content they're interested in.
25 Nisan 2008 Cuma
Report: Regulators looking at Google/Yahoo AdSense test
The U.S. Department of Justice is looking into possible antitrust implications in Google Inc.'s search test with Yahoo Inc., according to reports Wednesday.
Reuters, citing a source who was told of the matter, said some concerns center around a telephone call from Mountain View, Calif.-based Google (NASDAQ: GOOG) CEO Eric Schmidt to Sunnyvale, Calif.-based Yahoo (NASDAQ: YHOO) CEO Jerry Yang, in which they may have discussed ways to thwart a takeover attempt of Yahoo by Microsoft Corp.
Earlier this month Yahoo said it would begin a limited test of Google's AdSense for Search service, which will deliver relevant Google ads alongside Yahoo's own search results.
Yahoo said the test would apply only to traffic from yahoo.com in the U.S. and not include Yahoo's extended network of affiliate or premium publisher partners.
The test is expected to last up to two weeks and will be limited to no more than 3 percent of Yahoo search queries, the company said.
Yahoo said the testing does not necessarily mean that Yahoo will join the AdSense for Search program or that any further commercial relationship with Google would result.
Yahoo has been talking with Google as part of its search for alternatives to Redmond, Wash.-based Microsoft's (NASDAQ: MSFT) unsolicited $44.6 billion acquisition offer.
Controlling Targeted AdSense Ads on Your Site
The Google AdSense Ad Review Center is now available to all affiliates using AdSense.
This feature enables you to review all ads placement-targeted to your site, so you get more control over which ads are displayed.
Some advice from the AdSense team…
Before getting started, we strongly recommend keeping your review preference set to the default of ‘Run ads immediately.’ This will let you allow or block ads after they have run. If you choose the other option of ‘Hold ads,’ the ads will await review for 24 hours before being allowed to run automatically. Using the ‘Hold ads’ setting will keep ads from participating in the auction while they await review, potentially lowering winning bids and your AdSense earnings. Ads that you have blocked can’t compete in the auction either, so we ask that you keep in mind the revenue impact of blocking ads or switching from the ‘Run ads immediately’ setting.
You can check out the Ad Review Center by going to your ‘Competitive Ad Filter’ page, located under the ‘AdSense Setup’ tab.
More details at http://adsense.blogspot.com/2008/04/ad-review-center-available-to-all.html.
Google accused of deception in selling AdSense keyword ads
NEW YORK (AP) — An advertiser sued Google Inc. in federal court Tuesday claiming the company deceived him and charged for ads displayed on third-party Web sites, even though he left blank an "optional" box that seemed to address the issue.
The dispute is over Google's popular AdSense program, which targets ads to keywords in articles and other content at participating sites. The program complements the traditional AdWords program, which runs targeted ads alongside Google's search results. Ads under both programs generate the bulk of Google's revenues.
The lawsuit accuses Google of defrauding advertisers out of millions of dollars collectively by "redefining the universally understood meaning of an input form left blank."
The plaintiff in the case, David Almeida, had signed up for Google ads to promote his private investigation business in Massachusetts. Because he did not want to buy AdSense ads, Almeida said he left the maximum per-click bid blank, believing "optional" meant he could opt out of the AdSense program by doing so.
Instead, it turned out the AdWords bid applied when he did not exercise that option, and he should have put "zero" into the box to opt out, said his attorney, Brian Kabateck.
"Most of the customers that actually fall victim to this scam are the unsophisticated advertisers," Kabateck said. "The sophisticated advertisers will know better, will know how to do it. These are the little guys that don't have money to lose on a program like this."
Google declined comment, saying it had not yet received the complaint.
The lawsuit was filed in U.S. District Court in San Jose, Calif., by Kabateck, Brown and Kellner, a law firm that has frequently filed consumer-protection lawsuits that seek multimillion dollar judgments or settlements. The lawsuit seeks unspecified damages and class-action status.
Kabateck estimated the unwanted advertising involved brings hundreds of millions of dollars in revenue to Google, though he could not immediately say how much Almeida specifically lost.
Kabateck has tussled with Google before and ultimately joined in a $90 million settlement in 2006 over "click fraud," in which merchants are billed for fruitless traffic generated by someone who repeatedly clicks on an advertiser's Web link with no intention of ever buying anything.
Kabateck also reached a multimillion dollar settlement with Yahoo Inc. over similar complaints.
01 Nisan 2008 Salı
Tradedoubler launches rival contextual network to Google Adsense
TradeDoubler has today announced that it is to launch a new product called td AdMatch which will provide contextual advertising for some of it affiliate partners.
td AdMatch is designed to maximise the performance of online advertisements and is unique in its ability to serve ads across text, image and display ad formats.
td AdMatch scans the content of web pages and contextually matches ads alongside related website content. By improving the relevancy of advertising on publisher websites, internet users are more likely to respond - helping to drive higher quality click-throughs and increase results for both advertisers and website publishers.
As a supporter of contextual advertising, Chris King, Head of Affiliates at BT, said: “We’re excited about the possibilities afforded by td AdMatch. Online consumers are becoming ever more savvy and the need for solutions to more effectively engage with them through targeted, relevant advertising is growing.
td AdMatch will allow BT to drive even better performance from our ads through contextual targeting.”
Joshua James, Head of Client Services at eConversions, has been impressed with the initial trials of td AdMatch and comments, “Having been chosen to help trial TradeDoubler’s td AdMatch solution, we at eConversions have been very impressed with the initial results and are eagerly anticipating the full launch.
With the ability to display contextual product feeds, image and text ads, or even all three, td AdMatch can add true value to a website. However, what really separates td AdMatch from its rivals, is how it is able to match such highly relevant ads to the content of a website - something others have promised but, thus far, failed to deliver upon.”
td AdMatch works across automated and manual specified keyword matching and allows publishers to create their own, customised ads. The product ensures control and transparency for the entire network, with advertisers only appearing on approved sites and publishers only receiving ads for advertisers they have applied to.
Commenting on the launch of the new solution, Ben Manning, Product Director at TradeDoubler, says: “td AdMatch allows TradeDoubler to harness our broad and diverse range of advertisers and contextually match their ads to content from our extensive affiliate network, whilst giving control and transparency to both publishers and advertisers.
This vast breadth is important because it increases relevancy and allows more accurate targeting of an advertiser’s audience to drive even more results.”
IncrediMail Reports Record Revenues, Increasing 72% in 2007
IncrediMail Reports Record Revenues, Increasing 72% in 2007
2007: 42% of Revenues From ‘Search; EBITDA Up 24% to $3.1M
Q4: Revenues Rise 34% YOY to $5.4M
TEL AVIV, Israel--(BUSINESS WIRE)--IncrediMail Ltd. (NASDAQ:MAIL) (www.incredimail-corp.com), an Internet content and media company, today reported financial results for the fourth quarter and full year ended December 31, 2007.
- Non-GAAP net profit $3.0 million for 2007, $0.7 million for Q4 2007
- Google discussions progressing, search-generated revenues return to growth
- Write-down of $4.9 million from Auction Rate Security
Revenues:
Revenues for 2007 increased to a record $18.7 million, up 72% from $10.9 million in 2006. Search-related activities generated 42% of the year’s revenues, compared with 13% in 2006, while product and subscription revenues also grew moderately throughout the year. Registered downloads during the year averaged 1.2 million per month, giving the Company a total of 86 million registered downloads as of year-end.
Revenues for the fourth quarter of 2007 increased by 34% to a record $5.4 million compared with $4.0 million for the fourth quarter of 2006. Search-related activities generated 49% of the quarter’s revenues, compared with 27% in the fourth quarter of 2006, while product and subscription revenues also grew moderately throughout the quarter.
Commenting on the results, Mr. Ofer Adler, CEO of IncrediMail, said, “2007 was a period of accelerated growth and investment, which we believe has positioned us for continued strong progress in 2008. The year’s 72% increase in revenues reflects the exceptional growth of our ‘search’ activities, which has proven to be a potent channel for monetizing our large user community. In parallel, however, our other new initiatives, including trials in the area of ‘branded content’ and our ‘community’ product, did not prove to be cost-effective, and we have discontinued them recently. Given our large user base and our proven model for monetizing it, our strategy for 2008 is straightforward: to focus on our core business, expand our user base, invest in user retention, and maximize the opportunity for our users to engage in search.”
Mr. Adler continued, “To this end, we made significant investments throughout 2007 to develop new products and the next generation of existing products, an effort we believe will assist us in reducing the current level of churn and reaching new demographics. In the coming quarters, we plan to launch totally new IncrediMail and Magentic products, together with the full release of our ‘Messy’ Instant Messaging tool.
"In parallel, we have begun stepping up our customer acquisition activities. We plan to expand our targeted online advertising campaigns, increasing our Traffic Acquisition Costs (“TAC”) dramatically, although not at a rate that will create an operating loss. We believe the combination of our new products and the advertising campaign will expand our user base by 15% or more by year-end, resulting in a revenue increase of 30% or higher for 2008 compared to 2007, and an even greater increase in revenues and profits in 2009.”
Operating expenses:
The significant investment in product development, sales and marketing caused the Company’s operating expenses to nearly double in 2007, reaching $14.7 million for the year and $4.6 million in the fourth quarter of 2007, compared to $7.7 million and $2.7 million in the same periods of 2006
Mr. Adler continued, “The focus of our R&D effort in 2007 was to create the new IncrediMail, Magentic and Messy products that will be launched during the next few months. Although these investments did not generate revenues in 2007, they are key elements of our customer retention and new customer acquisition strategy. With the R&D ramp-up essentially behind us, we will now redirect our efforts to our TAC, increasing them significantly from their 2007 level of approximately $1.4 million. In parallel, we have streamlined the business around our core activities, discontinuing projects that have not met our revenue expectations. We believe a tightly-focused business strategy and a leaner organization are the right platform for building the Company to the next level of revenues and profits.”
Financing expenses – write-down of security:
Financing expenses for the year and the quarter included a one-time write-down of $4.9 million taken to reflect the revaluation of a $5.0 million Auction Rate Security purchased as an investment in July 2007. Recent volatility in global credit markets has adversely affected the liquidity of this security. As a result, the security was recently downgraded from a AAA to a CCC rating by Standard & Poor’s. Although the Company continues to receive interest payments every 28 days, in light of a valuation of the security recently received from the Company's banker, the Company has recorded an “other than temporary impairment” charge of $4.9 million on its statement of operations. The Company has no other Auction Rate Securities or CDOs.
Net results:
Including the abovementioned write-down, net loss for 2007 according to U.S. GAAP was $3.0 million, or $0.32 per diluted share. Excluding the write-down, stock-based compensation and impairment of intangible assets, the Company recorded non-GAAP net income for 2007 of approximately $3.0 million, essentially unchanged from 2006, or $0.31 per diluted share, compared to $0.33 per diluted share, for 2006.
For the fourth quarter of 2007, U.S. GAAP net loss was $4.8 million, or $0.50 per diluted share. Excluding the write-down, stock-based compensation and impairment of intangible assets, the Company recorded non-GAAP net income for the fourth quarter of $0.7 million, or $0.07 per diluted share, compared to $1.1 million, or $0.11 per diluted share in the fourth quarter of 2006.
Relationship with Google:
On January 21, 2008, following a ten-day suspension, the Company was reinstated as a Google AdSense Online Partner. The suspension primarily reflected Google’s desire to assure IncrediMail’s compliance with the Google AdSense for Search program. At no time did Google accuse IncrediMail of “click fraud” or any other illegal or unethical practices. Since reactivation of IncrediMail’s AdSense account, Google and IncrediMail have been engaged in negotiations aimed at the creation of a direct agreement, and they are progressing in a positive direction.
Although IncrediMail recorded no search-related revenues during the 10-day suspension period, its search activities returned immediately afterwards.
Mr. Adler continued, “We are pleased to report that our discussions with Google towards an even stronger relationship are progressing, and that our daily search revenues are once again on an upwards trajectory. Our negotiations with Google have reached their final stages, and we feel positive and optimistic regarding their outcome. In the meantime, we are carrying out trials with other premier ‘search’ players who are attracted by the unique size, demographic profile and ‘Effective CPM’ record of our user base.”
Change in Management and New Strategic Plan:
On February 5, 2008, Mr. Ofer Adler, the Company’s co-founder, director and Chief Product Officer, was appointed the Company’s new CEO.
Mr. Ofer Adler concluded, “I believe that we have only begun to scratch the surface of IncrediMail’s real potential, and am fully committed to achieving a new level of growth in the year ahead. Benefiting from the experience gained over the past years, we are completing our new strategy focused on core products and the proven search model. To enable us to fully present and discuss this strategy during our normal quarterly conference call, we have chosen to delay the call for two weeks. As such, we invite all interested parties to join us for a full update on Wednesday, April 16th, at 10:30 AM EDT.”
Conference Call
IncrediMail will host a conference call to discuss its results and its plans going forward on Wednesday April 16th at 10:30 AM EDT. We invite all those interested in participating in the call to dial 1 (888) 668-9141. Callers from Israel may access the call by dialing (03) 918-0650.
Participants may also access a live webcast of the conference call through the Investor Relations section of IncrediMail's website at www.incredimail-corp.com. The webcast will be archived on the company’s website for seven days.
About IncrediMail Ltd.
IncrediMail is an Internet content and media company. Founded in 1999, IncrediMail’s products bring a new level of fun, personality and convenience to email, desktops and screen savers, and have been downloaded more than eighty million times. Having secured more than ten million active users, IncrediMail is now branching out into Instant Messaging, using its unique content and approach to enhance the user experience.
Non-GAAP measures
Use of Non-GAAP Financial Information - In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, IncrediMail uses non-GAAP measures of net income and earnings per share, which are adjustments from results based on GAAP to exclude write-down of marketable securities, non-cash stock-based compensation expenses and impairment of intangible assets, net of applicable taxes. IncrediMail's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of IncrediMail’s on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors.
Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words “believe,” “expect,” “intend,” “plan,” “should” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the markets in which the Company operates and in general economic and business conditions, loss of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time. The Company does not assume any obligation to update these forward-looking statements.
| INCREDIMAIL LTD. BALANCE SHEETS | ||||||
| U.S. dollars in thousands (except share data) | ||||||
| | | |||||
| | | December 31, | ||||
| | | 2007 | 2006 | |||
| | | | | |||
| ASSETS | | | | | ||
| CURRENT ASSETS: | | | | | ||
| Cash and cash equivalents | | $ | 4,611 | | $ | 8,366 |
| Short-term bank deposits | | | 1,000 | | | -- |
| Marketable securities | | | 17,811 | | | 17,381 |
| Trade receivables | | | 1,993 | | | 1,828 |
| Deferred taxes | | | 368 | | | 418 |
| Other receivables and prepaid expenses | | 1,678 | | 611 | ||
| Total current assets | | 27,461 | | 28,604 | ||
| LONG-TERM ASSETS: | | | | | ||
| Severance pay fund | | | 1,037 | | | 589 |
| Deferred taxes | | | 92 | | | 221 |
| Long-term deposits | | | 482 | | | 412 |
| Restricted cash | | | 158 | | | 92 |
| Long-term investments | | | 100 | | | -- |
| Property and equipment, net | | | 1,808 | | | 877 |
| Goodwill | | | 125 | | | 288 |
| Other intangible assets, net | | 164 | | 341 | ||
| Total long-term assets | | 3,966 | | 2,820 | ||
| Total assets | | $ | 31,427 | | $ | 31,424 |
| | | | | |||
| | | | | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | ||
| CURRENT LIABILITIES: | | | | | ||
| Trade payables | | $ | 1,546 | | $ | 464 |
| Deferred revenues | | | 3,254 | | | 3,703 |
| Accrued expenses and other liabilities | | 3,124 | | 2,876 | ||
| Total current liabilities | | 7,924 | | 7,043 | ||
| LONG-TERM LIABILITIES: | | | | | ||
| Deferred revenues | | | 1,559 | | | 951 |
| Accrued severance pay | | 1,392 | | 853 | ||
| Total long-term liabilities | | 2,951 | | 1,804 | ||
| | | | | |||
| SHAREHOLDERS' EQUITY Shares issued and outstanding: 9,475,943 and 9,399,458 at December 31, 2007 and 2006, respectively | | 20,552 | | 22,577 | ||
| Total liabilities and shareholders' equity | | $ | 31,427 | | $ | 31,424 |
| INCREDIMAIL LTD. STATEMENTS OF OPERATIONS | ||||||||||||||
| U.S. dollars in thousands (except per share data), unaudited | ||||||||||||||
| | | | ||||||||||||
| | | Three months ended December 31, | | Year ended December 31, | ||||||||||
| | | 2007 | 2006 | | 2007 | 2006 | ||||||||
| | | | | | | | | |||||||
| Revenues | | $ | 5,358 | | | $ | 3,987 | | $ | 18,675 | | | $ | 10,851 |
| Cost of revenues | | 570 | 285 | | 1,740 | | 858 | |||||||
| | | | | | | | | |||||||
| Gross profit | | 4,788 | 3,702 | | 16,935 | | 9,993 | |||||||
| | | | | | | | | |||||||
| Operating expenses: | | | | | | | | | ||||||
| Research and development | | | 1,999 | | | | 1,030 | | | 6,125 | | | | 3,251 |
| Selling and marketing | | | 1,397 | | | | 725 | | | 4,682 | | | | 1,767 |
| General and administrative | | | 1,006 | | | | 925 | | | 3,693 | | | | 2,717 |
| Goodwill impairment | | 163 | ||||||||||||