Moving ever closer to its planned merger with US firm FindWhat, Internet advertising company, Espotting has announced its first ever profitable quarter.
Founded in 2001 by friends Daniel Ishag and Seb Bishop, Espotting confounded the dotcom downturn to become one of the online success stories of the past three years.
Benefiting from the escalating boom in paid-for-search advertising, which allows advertisers to sponsor search results on big sites such as AOL, MSN and Yahoo!, the company recently announced revenues for the first quarter topping £16.8m, that’s a 67% rise on last year.
Chrys Philalithes, marketing director at Espotting, described the news as a milestone for the company, which has seen increasing competition from Overture and Google in the past year.
According to FindWhat, the US rival due to buy out the company later this year, Espotting's earnings before interest, tax, depreciation and amortisation for the first quarter were between £2.2m-£2.8m ($4m and $5m).
FindWhat, which also announced its first-quarter results, reported a
net profit of £2.1m ($3.8m), up from £1.5m ($2.7m) last year, on revenue that rose 56% to £13.8m ($24.7m).
Espotting and FindWhat said that their shareholders would be meeting independently in early June to vote on the merger, which is expected to close on 1st July.
The red hot paid-search medium has been embraced by large advertisers, including car manufacturers and financial services groups, as a way of reaching Internet customers searching for information on specific topics.
Because advertisers only pay when users "click through" to a site, the medium was seen as a cost effective way of gaining customers during the recent advertising downturn.
The paid-for-search sector has also been a massive boost for Yahoo!, which spent £1bn acquiring Overture last year and has seen a huge leap in revenues as a result.
Google, with its AdWords service, has also benefited.
The success of paid-for-search advertising last year helped UK online advertising revenues overtake cinema for the first time and has been hailed as a mark of the sector's return to health.
Sources: New Media Age, Guardian Unlimited
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