Creditcards.com has filed an S-1 filing with the SEC to start the process of an IPO.
The company wants to raise around $115 million with this IPO.
In October 2006, we paid approximately $133.8 million in cash (including approximately $350,000 in transaction fees and expenses) and issued approximately 2.1 million shares of Series A-1 convertible redeemable preferred stock at a price per share of $7.82 to the owner of the Predecessor in exchange for substantially all of the assets of the Predecessor.
Some very interesting information can be gleamed from the filing including their sources of traffic as well as the number of visitors that they receive per year. During the last year they increased revenue per visitor by 46% - Wow!
Imagine owning a business that generates $43M in revenues and has net income of $18.4M last year, and you have no inventory, no real “service” that anyone has to perform, and no big sales team hitting the streets. Thats exactly what CreditCards.com had in 2006.
Some of the risk factors that are ourlined in the filing highlight their reliance on PPC as a business model:
“We spent over 80% of our total online advertising expenses in 2006 with Google and Yahoo!. Competition for paid search advertisements on these search engines is intense. The prominence of the placement of our name and website is determined by a combination of factors, including the amount we are willing to pay and algorithms designed to determine the relevance of our paid advertisement to a particular search term.”
Additionally, SEO is addressed:
“If we are unable to maintain high rankings in Internet search results, traffic to our website and our revenues will decrease.”
This looks like a very interesting IPO to watch, it appears that they have had plenty of investors along the way, including Austin Ventures, which manages nearly $3 billion worth of assets. This may be the start of companies that have built a company around a domain name seeking IPO filings.
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