Gotham City Research initiates coverage on Blucora Inc (NASDAQ:BCOR) (a.k.a. Infospace).
“Google’s first step is easy: Fire InfoSpace (a.k.a. Blucora). Google Inc (NASDAQ:GOOG) doesn’t need InfoSpace, and there’s zero reason for this relationship to continue in light of InfoSpace’s repeated failings.”
– Harvard Business School Professor Benjamin Edelman, author of The Darker Side of Blinkx, and the “Doogie Howser of online investigative work” according to former federal prosecutor Richard Boscovich
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GOTHAM CITY RESEARCH’S OPINIONS ON Blucora Inc (NASDAQ:BCOR)
- +60% of Blucora Inc (NASDAQ:BCOR) ’s revenue will evaporate in coming quarters, as Google Inc (NASDAQ:GOOG) realizes it is better off without BCOR. Google Inc (NASDAQ:GOOG) and Yahoo can walk away from Blucora any time.
- At least 50% of BCOR’s traffic is derived from malware, click fraud, illicit traffic (e.g. child pornography), and otherwise suspect traffic.
- Blucora and its partners’ practices will receive scrutiny from Google, advertisers, FTC, DOJ, FBI, IRS, &/or the SEC.
- BCOR shares are worth no more than $5.00/share, and <$1.00/share if BCOR compensates affected parties.
Blucora Inc (NASDAQ:BCOR) SUMMARY OF FACTS
- 94.81% of Infospace.com visitors go to css.infospace.com, a known redirect virus/browser hijacker.
- Infospace.com/Iminent.com generate clicks via cloaking, a practice forbidden per Google’s Webmaster Guidelines.
- 3 of dogpile’s Top 10 search words are child porn-related. Webcrawler aggressively purchased child porn search traffic in recent quarters.
- Google prohibits advertising related to child pornography.
- 80+% of webcrawler’s visitors originate from outside the US, yet only ~1% of BCOR’s revenues are international.
- Ads displayed in Blucora-branded search results violate requirements set in their 2011 Amended Agreement.
- Metacrawler is the 3,301st most visited site, yet is defunct.
- ~10% decline in Google revenues wipes ~50% of BCOR EPS.
- BCOR has a storied history of defrauding investors, customers, and vendors over the last 15+ years.
- Free cash flow has gone negative over the last 9 months.
- ~50% of recent cash flow from operations consists of increases in accrued liabilities.
- Non-GAAP reporting, not seen since 2003, is back.
- Audit fees declined sharply, after changing auditors in ‘12.
- Gotham City Research contacted Blucora on several occasions and did not hear back from the Company.
207697112 Blucora i e Infospace Worse Than Blinkx Plc Babylon Ltd