Why I Bought FindWhat.com (NYSE: FWHT) I had recommended this stock in Stocks 2004 when the stock was at $14. It rose into the $20s before settling back in the high teens for a still healthy return a year later. I didn't own it then. After the year was up and the stock cratered I kicked the tires again, liked what I saw, and bought back in early in 2005. FindWhat is no Google (Nasdaq: GOOG) or Yahoo! (Nasdaq: YHOO) but it does feed at the same paid search trough. Advertisers bid as little as a nickel to receive search engine placement on selected terms and keywords. For every interested click on the three line text ad -- usually a quality lead -- FindWhat gets a the amount of that bid. It's cost effective for the sponsor because they are able to target their marketing message and pay only for those who are lured over to their site. FindWhat makes money because these clicks add up in a hurry. It has its own search sites as well as third party sites that split the proceeds with FindWhat for running the site's ad inventory. FindWhat has been profitable since 2001. Yes, it's disheartening to see Google do so well, more than doubling since it IPO in August of 2004 while FindWhat is trading lower at the moment (here in April of 2005). Yet paid search has served FindWhat well. It has been consistently profitable since 2001. Yes, it's not the upper crust but with Google, Yahoo! and now Microsoft (Nasdaq: MSFT) entering the fray it may make a tempting acquisition target the way that AskJeeves (Nasdaq: ASKJ) was recently scooped up by InterActiveCorp (Nasdaq: IACI). Why would I sell FindWhat? If the paid search trend disintegrates or if FindWhat itself falls out of sponsor fancy -- and that would lead to red ink instead of black -- I would definitely consider cutting ties with the investment. While FindWhat is valued cheap enough where it may even be able to sustain a possible downturn in online advertising the reasons behind my initial excitement would be gone. Go Back UNDER

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