What I was glad to get confirmation of is that their mobile ad network / serving business continues to be gaining a lot of traction. Traditional mobile marketing business is often a longer term campaign which involves longer lead times and set up. It also takes longer for the company to recognize the revenues associated with it. While the company is still doing this business, they launched their own in house ad serve network a year ago which was really smart. Look at the growth from it in just its first year. Their ad network is actually a premium ad network so the margins are higher than others. What's important though is that mobile advertising is where the majority of ad dollars are currently being spent and the biggest percentage of the market. By offering their own ad network in house, they have opened up a completely new vertical that allows them to capture more of their clients ad spend keeping them from having to go to another company as they might have in the past. Those ad dollars are often spent very quickly in just period of weeks and then the brand must do it again. In other words it's a very quick turn for the company and when completed, the advertisers must again commit more add dollars. All very smart and encouraging to see. With their established customer base and retention rate, I'd look for continued high growth on that side of their business. There's no reason why a year or two out that Hipcricket by itself shouldn't be a $100 million dollar revenue company. The opportunity is right in front of them and theirs to be had if they continue to execute as they did this past quarter.
I just alluded to this as well mobile. Ad Serve is a huge under dog that is proving to be a solid reason behind the 20% sequential growth of the company and their confidence in future growth rate. This is what MM does but now Augme offers its own stand alone Ad network via Ad Serve. The major difference is that those clients that go with us can grow into total end to end marketing on a single platform in the future via Ad Life where is MM or P can not offer that! In another year Ad Serve will be huge undeniable competition to MM's Ad network. And as you alluded to the dollars spend in Mobile Ad arena are much quicker and EASIER to earn.
When you look at millennial media selling for 6-8 times ttm revenues and augme selling for 2.5 times ttm revenue something needs to give. Throw in that augme has a court date next year with them just adds to the discrepancy.