In news that was reported just after the closing bell on the NASDAQ market today, Marchex has announced that it will not be spinning off Archeo into a separate company as the company had considered. Here’s what Marchex said in its press release this afternoon:
“Marchex came to this conclusion as part of a recent strategic review. The review began this summer after Marchex sold certain pay-per-click assets, which were operating under Archeo, in July. Marchex sold the assets to help sharpen Archeo’s focus and market opportunity around domains, but as a result, Archeo’s overall financial profile became smaller.
The review determined that the incremental costs and complexities associated with taking Archeo public at this time would be prohibitive, and that Archeo’s value to shareholders is best recognized as a segmented division of Marchex.”
It’s a bit disappointing to me that Archeo isn’t going public as a separate entity. I think it would be exciting to follow the growth of a publicly traded company that is entirely focused on domain name assets. As you can see from the “About Marchex” paragraph at the end of the press release and the “About Us” page on its website, Marchex doesn’t acknowledge its domain name business.
Russell Horowitz, Chief Executive Officer and Chairman of Marchex made an interesting comment in the press release: “Archeo has tremendous asset value and we will continue to consider various strategic options.” Perhaps an outside company will have an interest in acquiring the Archeo business unit from Marchex. The company has made some key hires for Archeo of late, and they also recently released its marketplace in beta.
You can read the full press release from the company below:
SEATTLE—(BUSINESS WIRE)—September 19, 2013— Marchex, Inc. (NASDAQ:MCHX), a leader in mobile performance advertising, today announced that it will not pursue a spin-off its domains-related assets into a stand-alone, publicly-traded company at this time and that Archeo will continue to operate as an independent division of Marchex.
Marchex came to this conclusion as part of a recent strategic review. The review began this summer after Marchex sold certain pay-per-click assets, which were operating under Archeo, in July. Marchex sold the assets to help sharpen Archeo’s focus and market opportunity around domains, but as a result, Archeo’s overall financial profile became smaller.
The review determined that the incremental costs and complexities associated with taking Archeo public at this time would be prohibitive, and that Archeo’s value to shareholders is best recognized as a segmented division of Marchex.
“This is the right decision for Marchex and our shareholders,” said Russell Horowitz, Chief Executive Officer and Chairman of Marchex. “Archeo has tremendous asset value and we will continue to consider various strategic options. In the meantime, this decision frees up valuable resources and allows us to direct Archeo’s positive cash flow to both build Marchex’s balance sheet and fund Archeo’s growth initiatives.”
Archeo, which earlier this month announced the launch of its Archeo Domains Marketplace, will continue to execute on its business strategy of building a
The new online marketplace
Marchex also announced today that its Board of Directors has approved a plan to allocate a portion of Archeo’s cash flow to fund an ongoing quarterly Marchex shareholder dividend, subject to capital availability. Marchex anticipates it will fund a $0.02 per share quarterly dividend beginning in the first quarter of 2014. The aggregate quarterly dividend for the first quarter of 2014 is estimated at approximately $720,000. This dividend plan replaces, and depending on Archeo’s cash generation, may increase and potentially exceed Marchex’s prior dividend, which was put in
Few sales/revenue (in real terms if you factor in “cost”), to many overpaid ‘Fat Cats’ (employees), Stagnate Inventory, Zip Code domains that never had a chance, no Growth potential…
Taxi! Taaaaxi!