Friday, December 16, 2011

CrowdGather (CRWG) Repeats Early Internet Model

Mailbag time!  Did I blog about CrowdGather (CRWG) already?  I honestly can't remember.  These Web 2.0 stocks often look and sound like things I've seen before.  In CrowdGather's case, their business model of aggregating online forums and message boards is already done well by Yahoo and Google, and to a lesser extent by Facebook and LinkedIn.  Investors would need a very compelling reason to invest in a company that has a 1990s approach to Web 2.0.

A quick look at the financials doesn't give investors such a compelling reason.  Three years of net losses, negative retained earnings, and free cash flow give us little reason for hope.  The management team at present does have three serial entrepreneurs, so that's one good thing.  Maybe they'll pool their smarts and figure out how to monetize those message boards with advertising.  Actually, Google already does that with Adsense for blogs.  Google even bought the old Deja Usenet groups many years ago, and they still seem to exist as a kind of subterranean, antiquated part of the Internet. 

Who's responsible for sending me the teaser brochure?  Ah yes, Eric Dickson of Trinity Investment Research.  These constant mailed touts for Breakaway Stocks Online are beginning to bore me.  Click my "penny stock" meta tag on this post to see some other blog posts I've written about the absolute gems that Trinity's research uncovers. 

Full disclosure:  No position in CRWG or other companies mentioned at this time.