CrowdGather Inc. (OTCBB: CRWG), an Internet company specializing in the development and hosting of online forums, offers an attractive alternative to social media companies like LinkedIn Corporation (NYSE: LNKD) and Google Inc. (NASDAQ: GOOG). In this article, we’ll take a look at some evidence to support this thesis and why this stock appears undervalued.
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Forum vs. Social Media Engagement
Online forums engage users more than many other types of social media. For instance, some 85.3% of all Twitter users post less than one update per day, while 21% haven’t posted any tweets at all, according to Marketwire. Other social media giants, like LinkedIn, aren’t faring much better with 1% of its users accounting for 34% of its traffic by some estimates.
By contrast, most online forums attract a passionate and more engaged user base. For example, CrowdGather has approximately 16 million people registered on their network sites with more than 350 million posts, according to their latest 10-Q filing with the SEC. Moreover, forum users tend to be centered around one niche – such as golf or paintball – making them ideal for advertisers looking for better targeting.
Bridging the Social Monetization Gap
Many Internet stocks are valued by a metric called Average Revenue Per User (ARPU). For example, Facebook had an ARPU of $2.30 in December of 2009, according to a Deloitte study. While ARPU figures are on the rise, they are still much lower than many forms of traditional advertising, which is one of the reasons why companies like LinkedIn aren’t yet profitable.
CrowdGather offers a bridge between these two forms of income. Since online forums drive search traffic, the company generates a high number of page views and can monetize its properties via traditional CPM/CPC advertising. However, its advertising platform is also being fine-tuned to target specific niches and users, which could expand its possibilities.
A Better Alternative to Traditional Social Media
CrowdGather Inc. (OTCBB: CRWG) offers investors a unique opportunity in the social media sector. Its network of online forums offer greater user engagement than traditional social media, while its search engine friendly content gives it more revenue streams than many cash-burning social media giants out there today.
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