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Augme Technologies, Inc. Message Board

  • mobileguru20000 mobileguru20000 Oct 20, 2012 3:52 PM Flag

    "this could open the door to looking at more companies in the U.S. as well."

    Remember its was another foriegn carrier "Singtel" that bought mobile marketing company Amobee for $321 million at virtually the exact same revenue run rate Augme is at right now. Amobee won last years GSMA awards while HC finished close behind in the top 3, out of 600 entrants. Remember that Qualcomm had a partnership with Amobee and that Telefonica lost out on the bidding for them.

    More Mobile Ad Consolidation: Carrier SingTel Buys Amobee For $321 Million

    Ingrid Lunden

    Monday, March 5th, 2012

    The mobile ad market is projected to bring in revenues of $2.6 billion in the U.S. alone this year, and while that is only a small fraction of the wider opportunity in digital advertising, the space — fueled by the smartphone boom — is only going to get bigger, and that is attracting those looking for an early foothold. Today saw another example of that coming into shape: pan-Asian carrier SingTel today announced it would buy California-based Amobee to expand its own mobile advertising business, in a deal worth $321 million.

    SingTel — which has 434 million mobile customers in 25 countries, including Bangladesh, India, Indonesia, Pakistan, the Philippines and Thailand — is banking on brands wanting to target customers with mobile ads in the Asia-Pacific region, particularly in emerging markets.

    The $321 million price tag may represent a good return on investment for those companies that have backed Amobee — which had raised about $54 million (that’s the amount publicly disclosed; there could have been more) from backers that included Accel, Sequoia, Globespan, Vodafone, Cisco, Motorola, Telefonica and Amdocs. It also seems a big multiple on the company’s net assets, which are worth about $600,000, according to SingTel (via AFP).

    This is not SingTel’s first move into mobile ads but an extension of an existing operation: it says it already offers “geo-localization” services, and the capability of sending local deals and marketing promotions based on a customer’s profile.

    Amobee will give SingTel the ability to integrate those existing capabilities with its own an ad-serving platform that covers banner and rich-media ads. As all of Amobee’s existing employees, including CEO Trevor Healy, will be joining SingTel, it also gives the carrier a bolted-on team experienced in mobile ads.

    And as Amobee is in Redwood City, it also gives SingTel another route to tap into the Silicon Valley scene. The carrier has a venture fund, Innov8, which has made some investments in the Asia region (such as leading a $6.5 million round for group buying site Dealised) but this could open the door to looking at more companies in the U.S. as well.

    What’s not clear is how this deal will affect Amobee’s existing customer relationships when SingTel takes the company in-house. Amobee is not the world’s biggest mobile ad company (Google rules that roost, led largely by its search business) but it has an impressive list of customers, in addition to its ability to deliver a full suite of mobile ad services. Current customers include Google, Skype, eBay, Barnes & Noble, Nokia and France Telecom.

    Amobee will be rolled into SingTel’s Digital Life operations. This is a new business line that SingTel (like European counterpart Telefonica) has created to try to get the most out of all of its digital assets. The other two divisions at SingTel are consumer and enterprise/wholesale services.

    E-marketer estimates that mobile advertising will be worth $2.6 billion in the U.S. in 2012. Projections for worldwide mobile ad revenue are around $7 billion this year and $20 billion by 2015, according to SingTel.

    While that number represents significant growth over the year before (it’s more than double the $1 billion of 2011) it’s still just a fraction of the billions that will be made in digital advertising as a whole — and the number is positively dwarfed by overall ad market covering more traditional outlets like TV, newspapers, outdoor, etc.

    Still for those looking to pick the horse that might win future races, $321 million sounds like a good bet.

    The deal is expected to complete before June 2012.

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    • It is definitely true that this deal is not going to be last one in the space. There is going to be a lot more consolidation. Although Amobee was taken out at $321M it doesn't mean that a company that owns the foundational IP in the space will go for as little. That is exactly why we need to win a day in court or settlement. Upon that outcome the value of our company will increase tremendously to #$%$ considering how this space is exploding. I think as were waiting on the revenues to grow organically potential buyer are waiting to see what happens with our IP outcome before making a bid for us.

    • With ~150 million AUGT shares outstanding including all of the warrants and options, $321 million represents (are you ready for this?) a whopping $2.14/share. That would be a great return for anyone just getting in now at these prices, but for those who have an average cost that's higher than that...well, sorry about your loss.

      Also, just because Amobee's run rate was the same, what was their net cash position? Were they cash-flow positive? I don't know the answers to these questions, I'm just throwing them out there....

      • 2 Replies to spetty772002
      • I understand your point but you are not accounting for the fact that about 85% of the options and warrants have strike prices on average above $2.50. The majority of those may never be converted into shares. A more reasonable assumption would place HC's value alone in the neighborhood $2.70-$3.00 if a similar price were paid for Augme as was paid for Amobee. As just posted. Amobee really only had a $16 million trailing 12 month revenue number when acquired. After Q3, Augme should have a $20 plus million in 12 month trailing revenues. Amobee was not profitable and had no compelling patents to my knowledge.

      • Amobee's 2011 revenue was 30 million, don't know about cash flow positive, but probably not.

 
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