Answers.com (ANSW): Some food for ANSW thought.... In the...

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Rawnoc

Re: shmolton post# 233

Friday, 11/10/2006 6:42:06 PM

Friday, November 10, 2006 6:42:06 PM

Some food for ANSW thought....

In the conference call, they said their per click ad rates are current in the $1 range. With direct sales, they are $5 to $10. Let's use $1.50 and $7.50 or 5 fold (400%) higher....

They said more than half their sales will be direct sales by the end of 2007. That means have their sales will go up 400% just on rates (this doesn't even factor in greater traffic to the site which keeps shooting up). Virtualy all of these extra sales goes to the bottom line.

Working from break-even and say $3 million in sales.... that's an extra $6 millon to the bottom line per quarter. Using say 10 million shares outstanding... .60/quarter or $2.40/year EPS runrate. For simplicity, I'm ignoring all new deals and deals to come including the Yahoo one and just assuming all the new traffic just breaks even with increased costs.

We could have a $100+ stock potentially in a year.

Raw

PS -- Easy money in 2007. 2006 is still confusing for Wall Street as expected.

PPS -- faqfarm.com is already cashflow positive. They said it will be negative just at first as they invest in it to expand its profitability. Right now the RPMs on faqfarm.com is similar to the RPMs answers.com had in 2005.

Raw