Inuvo Inc (INUV) 2014 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Inuvo, Inc. 2014 first-quarter conference call. During today's presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions).

At this time, I'd like to turn the conference over to Alan Sheinwald of Alliance Advisors. Please go ahead, sir.

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the Inuvo first-quarter 2014 shareholder update conference call. Mr. Richard Howe, Chief Executive Officer, and Mr. Wally Ruiz, Chief Financial Officer of Inuvo, will be your presenters on the call today.

Before we begin, I'm going to review the Company's Safe Harbor statement. Statements in this conference call that are not descriptions of historical facts are forward-looking statements relating to future events. And, as such, all forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially.

When used on this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to Inuvo Inc., are such a forward-looking statement. Investors are cautioned that all forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by Inuvo at this time. In addition, other risks are more fully described in Inuvo's public filings with the U.S. Securities and Exchange Commission, which can be reviewed at www.SEC.gov.

Well, with that out of the way, I would now like to congratulate management on a strong first- quarter, and introduce Mr. Richard Howe, CEO of Inuvo. Rich, the floor is yours.

Thank you, Alan. And thanks, everyone, for joining us today. I'm very pleased to report that the first quarter of 2014 was the most profitable quarter in recent memory. We've worked very hard to meet our strategic objective to build a scalable business model that will deliver both growth through the right mix of product and profit.

In the first quarter, we delivered $10.1 million of revenue and $675,000 or $0.03 per share in profits. These first-quarter results and the second quarter's upward revenue trajectory give us confidence that we now have a scalable model that meets both our long-term growth and profit objectives, in addition to building value for shareholders through proprietary technology and content, which I will describe in more detail a little later.

On our year-end call in March, we shared the Company's two primary strategic goals for 2014. These were to accelerate our expansion into mobile, and to grow the ALOT branded network of content-rich and mobile-enabled websites and applications. At that time, we also provided additional information about our plans to accelerate the transition from Toolbar, a strategy we first introduced on our first-quarter 2013 conference call. It may be important to note that the Toolbar's current run rate represents less than 6% of overall revenue.

I'd like to now share some additional details about each of these goals within the context of our segments, beginning first with the Partner Network. Partner Network margins were strong in the first quarter. And while revenue was lower than in the previous quarter, we currently see an upward revenue trajectory within this segment. Revenue and margin impact in the quarter was due in part to the introduction of technological and Network Systems innovations that were deployed in late 2013, that allowed for more advanced monitoring and better enforcement of network contracts and policies.

One of these innovations, now adopted and implemented by roughly 3/4 of our publishers, is a service that allows partners to more easily consume and optimize our ad inventory, while at the same time, providing Inuvo with deeper insights into where and how various partners utilize that ad inventory. These new technologies can be deployed by our publishing partners in a fraction of the time of our previous solutions, which in turn, expands our universe of potential partners.

Additionally, we are now also actively distributing display-based advertising products to publishers and mobile applications developers. These innovations, and a focus on publishing partners who themselves have concentrations in mobile, has allowed us to make significant progress towards our overall mobile goal as a company. In March of the first quarter, roughly 25% of this segment's revenue was directly related to mobile web and mobile application sources. Overall in the quarter, roughly 19% of this segment's revenue was from mobile traffic.

In addition to these publisher product innovations, we also began to enhance the platform that supports our partner business through improved set of tools and reports designed to provide these partners with more and better information upon which to improve the performance of their implementations. We will continue to add feature enhancements here, as our suite of publisher and application partnered products expands.

Now let's talk about the owned and operated segment. Within this segment, we continue to see great momentum and positive growth signals coming from the sites and mobile applications business. But before I talk more about that, I'd like to bring you up to speed on the progress we have made related to our Toolbar transition.

Revenue in the quarter from the Toolbar was roughly $1 million, down from $4.8 million the first quarter of 2013. While this difference in large part reflects the year-over-year revenue decline in the quarter, it also masks the accelerated growth rate occurring within the ALOT website and mobile applications business, which I will talk about in a second. We expect the Toolbar business to be fully transitioned by year-end, and remain certain that this was an important, and in hindsight, correct decision for Inuvo, given the climate surrounding the use and distribution of Toolbar applications online. Looking forward, we expect to see positive quarter-over-quarter growth within this segment, which indicates that the underlying growth rate in the site business is now overcoming the decline in the Toolbar business.

In the first quarter, we continued our aggressive expansion of content development within existing and new verticals. Some of the most valuable companies in our space have built both technology and content assets, and should be evident from our disclosures over the last 12 months that we are pursuing a similar path. We have built a truly scalable machine here, not just for the deployment of content online across devices, but also for content creation. We have now created and deployed thousands of individual content pieces that complement the more than 14 million merchant records that power the local dot-ALOT.com website.

Including our ALOT homepage, we now have a significant database of specialized content covering topics that include finance, health, careers, travel, local interest, legal; and very soon, we will be launching another new site at living.ALOT.com in our continuing efforts to broaden our content -- in this case, the consumer interest categories that includes entertainment, gardening, and fashion. We had almost 9 million unique visitors to the ALOT sites in the first quarter.

We also mentioned on our March call that we would be developing and distributing mobile applications as a complement to, and as an additional distribution mechanism for, this now considerable database of content. These mobile applications will be an extension to our sites, providing our users with utilities and information specific to their individual needs. Much of our activity today here has been to test in-market various global application monetization techniques. Expect to hear more about the launch of these applications over the coming months.

Further, and starting in the second quarter, we are also introducing site design features that highlight social sharing of contact, the integration of video, and the promotion of our own mobile applications. All of these enhancements are aimed at increasing user engagement, driving more organic traffic to the site, and ultimately, increasing overall revenue. Collectively, all of these efforts are yielding a significant return within this ALOT site and mobile applications business, which has grown 152% when compared to the first quarter of 2013, and 44% between Q4 2013 and Q1 2014. To put this in perspective, the business delivered roughly $1.5 million in profitable revenue in March alone, exceeding our internal plans and strategic goals.

Not only is this business growing, but it is also meeting our strategic objectives to expand into mobile. Almost 25% of all the revenue generated from this business in the first quarter was the result of consumer engagements through mobile devices. I'd like to also add that, in addition to the various products, sites and applications we are deploying, we are also greatly enhancing the information we collect within our networks, and utilization of that information either through better campaigns on the marketing side and/or improved ad targeting on the user experience side. We believe these efforts will be rewarded through improved margins in the future.

With that, I'd like to now turn the call over to Wally for a more detailed accounting of our year-end results. Wally?

Thank you, Rich. Good afternoon, everyone. Thank you for joining us today to discuss the Company's financial results for the first quarter of 2014. Our 10-Q as of March 31 will be filed with the SEC and be available this afternoon.

Inuvo reported net revenue of $10.1 million in the first quarter of 2014, compared to $15.9 million in the first quarter of last year. $5.4 million came from the partner segment, and $4.7 million from the owned and operated segment. The partner segment, which delivers advertisements to our partner's websites and applications, represents 54% of the Company's total revenue in the current-year quarter. The $5.4 million reported in the first quarter of this year was a 39% decrease from the same quarter last year.

The revenue decrease in the partner segment in the first quarter of this year compared to last year is due in large part to a program we initiated in the fourth quarter of 2013 that was designed to improve overall traffic quality by enforcing publisher contracts and the expansion of network operating policies that included the validation of traffic sources, technological detection of spurious traffic, publisher auditing, and the modification of publisher payment terms. The result of these changes was lower revenue in the segment in the fourth quarter of last year and into the first quarter of this year, but of a higher quality, which is expected to translate into higher revenue per click.

The owned and operated segment delivers advertisements to websites and applications that Inuvo designs, builds and markets under the ALOT brand. The owned and operated segment reported $4.7 million of revenue in the first quarter of 2014, a 33% decrease from the same quarter last year. As mentioned, the lower revenue in the segment is due to our decision to transition away from the Toolbar products. The Toolbar revenue in the first quarter of this year was $981,000, down from $4.8 million in the same quarter last year, partially offset by revenue from the ALOT sites and applications, which was $3.7 million, up 162% from the first quarter of last year, and 44% -- up 44% from the immediate prior-quarter.

Gross profit in the first quarter of 2014 was $6.4 million compared to $8.4 million last year. Partner segment gross profit was $1.9 million compared to $1.8 million last year. The changes implemented in the fourth quarter of last year to improve traffic quality, though causing lower revenue, improved margins in the segment in the first quarter of 2014. As we complete the implementation of our technology and policies, we expect, in subsequent quarters, revenue to grow and margins to settle to a level lower than the first quarter.

Gross profit in the owned and operated segment was $4.6 million compared to $6.6 million last year. The lower gross profit is due to lower revenue this year compared to last year. As a percent of revenue, the owned and operated segment gross profit was 98% in the first quarter of this year compared to 95% for the same quarter last year, due to transitioning away from the Toolbar to the owned and operated websites and applications.

Operating expense was $5.8 million in the first quarter this year. This is a $3.1 million decrease from the same quarter last year. All three categories of operating expense -- marketing costs, compensation, and selling and general administration expense -- improved in the first quarter this year compared to the same quarter last year.

Marketing costs are primarily costs associated with the owned and operating segment where we spend money to drive traffic to our landing pages, where successful results is when a customer clicks on an advertisement. Marketing costs decreased $1 million in the first quarter of 2014 from the same quarter last year. The lower marketing cost is due to the transitioning away from the Toolbar products, where we no longer spend to attract users. This was partially offset by higher spending for the ALOT sites and applications.

Compensation expense decreased by $893,000 in the first quarter of 2014 from the same quarter in the prior year. The lower expense in the current quarter is primarily due to a lower number of employees this year over last year. There were 32 full-time permanent employees at Inuvo at the end of March 2014 compared to 48 employees at the same time last year. In addition, in the first quarter of last year, we incurred a severance charge of $316,000 associated with the relocation to Arkansas.

Selling, general and administration expense decreased $1.1 million in the first quarter of 2014 compared to the same quarter in the prior year. The decrease in the current quarter SG&A expense is due primarily to lower depreciation and amortization expense associated with the closing last year of offices and data centers in New York and Florida; lower facilities expense due to the move in Arkansas; lower professional fees and T&E expense; as well as an adjustment to payables for over-accruals in prior years.

Going forward, on a quarterly basis, we expect marketing costs to increase as we roll out new owned and operated websites and applications; compensation expense to increase as we step up hiring, measure it with our growth; and SG&A expense to remain relatively flat.

Other net expense is primarily interest, and that was $98,000 in the first quarter of 2014. Last year's net interest -- or net expense was $107,000. This year's lower expense is due to lower average loan balance.

The Company reported a $76,000 income tax benefit in the first quarter of 2014 due to amortizing its deferred tax liability generated from intangible assets acquired in the March 2012 acquisition of Vertro. Net income from discontinued operations was $26,000 in the first quarter of 2013, and was composed of a reversal of liabilities to web publishers and vendors from 2009 and earlier. This compares to a loss of $125,000 in the same quarter last year.

The Company reported a net income in the first quarter of this year of $675,000 or $0.03 per share, compared to a net loss last year of $291,000 or $0.01 per share loss. EBITDA, adjusted for stock compensation expense and accrued severances, was approximately $1.3 million in the quarter that ended March 31, 2014, and that compares to an adjusted EBITDA of $1.4 million in the same quarter last year.

Turning to the balance sheet, cash and cash equivalents was $2.7 million at March 31 of this year compared to $3.1 million at the end of last year. Bank debt was approximately $5.5 million at the end of March compared to $6.1 million at the end of December 2013. Stockholders' equity was $6.1 million at March 31, 2014. On April 16, we received word from the New York Stock Exchange that they would extend to the end of May the time that Inuvo had to regain compliance with their continued listing standards. We believe, as of March 31, we meet the Exchange's standards, having a net income from continuing operations of $649,000, and a stockholders' equity in excess of $6 million.

With that, I'd like to turn the call back to Rich.

Thanks, Wally. We had a very profitable first quarter. And on a cumulative basis, the last six quarters combined have been profitable and cash flow-positive. We are excited about our prospects for the remaining year. Let me now summarize what has been said today.

The partner segment is growing again. The site and mobile apps business grew 44% quarter-over-quarter and 162% year-over-year, delivering $1.5 million of revenue in March. The Toolbar represents less than 6% of current revenues at this point. The Company expects to have another profitable year in 2014. In March, roughly 30% of overall revenue in the Company came from mobile. The changes we've made are actually opening up new opportunities for us with our major partners at Google and Yahoo!. And finally, we believe we now have a scalable content creation and multi-device delivery platform.

Now in addition to our operating goals, and now that we do have a scalable model, we also feel the time is right to invest in the business. With our debt down to roughly $5.5 million, we believe a better use of capital would be to drive growth as opposed to continuing to pay down debt. To that end, we are currently reviewing term sheets, with a goal to expand our capital availability by between $1 million and $2 million, through debt financing that we believe can immediately be used to drive growth. There are, of course, no assurances that we will be successful in the effort to secure financing on terms and conditions acceptable to the Company.

In our business today, we have more control, less risk, and greater ability to scale than we have ever in the past. Even without additional financing, we expect to remain profitable throughout 2014, with revenue expanding from the first quarter.

I would like to now turn the call back over to the operator for questions and answers.

(Operator Instructions) Howard Halpern, Taglich Brothers.

Congratulations. You might say a great quarter you guys delivered. Being fairly new to the story, could you just, I guess, describe what your overall strategic plan is? And how, I guess, content really plays a role in your growth plans?

You bet. So we said a number of times that this year, we have two primary objectives strategically -- to expand in mobile, and to grow the owned and operated business, which is directly related to the question you just asked about content.

So the reason why we have been focused on the owned and operated segment of the business is because through building that business, we are amassing quite a large database of proprietary content that can be repurposed and extended, and maybe more importantly, be delivered across multiple devices -- building mobile applications and websites, mobile web. There's a long list of places where that content can be used and then reused.

And for those of us who have build the data businesses in the past, the key to strong margins in a business like that is the reuse of that business. Once you've create it one time, you can reuse it as many times as you can find applications for it. So that's kind of been the goal.

Okay. And in terms of you talking about investing to grow the business, what would you use the proceeds for? Just strategic opportunities that you see? Or is there a specific thing that you actually see out there that could drive revenues quickly?

You bet. Thank you for asking that question. We figured somebody would. So, here's the really -- the good news. The additional capital that we might be able to bring into the business does not need to be applied towards building anything. Right now we have everything we need. So we would directly apply additional capital today in one or both of the following ways.

We have a number of partners on the partner side of the business that we could do more business with. And sometimes we can encourage them to do more business with us by having improved payment terms with them. So we might allocate capital towards that activity. That's one.

The second area is the owned and operated business. So, again, another reason why we went into this business was because we had so much more control over our own destiny in that part of the business. We market in that business. We are now building marketing campaigns, launching them and running them profitably, which means that if we have more money, we can do more of it. And since it is profitable, we know we can spend a dollar and get a dollar-plus return out of it.

Okay. Well, keep up the good work. And I'll jump back in queue and let somebody else ask a question.

Thank you.

Matt Paul, Sidoti & Company.

Hey, guys, this is Mike. I'm actually -- I'm filling in for Matt. Just a couple of questions. Wonder if you have any metrics in which you can maybe track the web traffic on the two most recent launches? And maybe throw some color on how that compares with the corporate portfolio.

Can you be a little more specific on the two most recent launches? What do you mean by that?

I just have -- I have the questions from Matt. He's traveling, so he wants to know more or less the metrics used to track web traffic.

Well, so he's probably referring to the sites. And so we've launched a number of sites right now. What I can say is on a revenue basis -- without quantifying the exact amount of money we make from each site because we don't disclose that -- but the sites are tracking on a per-site revenue very closely to what our original business plan had anticipated for them. So that's good.

As it relates to the amount of traffic that we are generating from the sites, I said in my call notes that, in the first quarter of this year, we saw 9 million unique visitors to the collective group of those sites. We don't split that out either, Mike. So -- but I will -- I can add this. I mean, the two -- most traffic sites in the portfolio right now are not surprisingly the first two we launched. Right? And that is the health site and the local sites.

Sure. Okay, great. And just talk about maybe the pace on the owned and operated, is that -- is there still more one website per quarter? Or are we right in thinking on that front?

I think it's been more than that, actually, because I think we launched more than one site in prior quarters. We will probably launch a site -- in fact, we will launch a site in the second quarter. Will we launch more than one site a quarter? Maybe -- is the answer.

And while it sounds like I'm not really answering the question, one of the things we are, of course, realizing, now that we are in this business in a big way, is that there are so many ways to expand the existing verticals we have. So, health, for example, is a category that we could broaden quite extensively.

And so, since we are having success in that particular vertical, we have a tendency at this point to say we'd be better off spending our time broadening our content repository in that vertical, as opposed to launching another three or four sites. That's particularly true on the margin side, because what happens when we launch a new site is we often start off in a neutral position from a profitability perspective; where on an existing site, like a health or a local or some of the bigger ones, we are already profitable. I hope that helps.

Sure, yes. And I think -- I don't know if I heard it correctly, but you guys expect revenue to increase going forward, but from margins, to decrease from the current period. Is that right?

Yes. (multiple speakers) No, you heard it correctly, Mike.

Okay. So can you throw some color on that? Is that mostly due to, what, increased marketing costs? Or -- I mean, how should we think of that going forward?

Yes. You know, what we were talking about is that we made a lot of changes in the fourth quarter. And among them there was auditing of publishers; we put in some validation procedures and processes. But in the end, the net of it all is that we made a bunch of changes in the partner segment in the fourth quarter of last year. And some of those changes involved contract changes. And some of those contract changes ended up favorable to Inuvo. Right?

As this implementation -- as we complete this implementation into Q1, the first quarter, that -- so the effect on margins will be diminishing. So, I would not expect the same margins that we had in the first quarter to see that in the second quarter.

So, I mean, so going forward, you guys expect maybe any one-time items impacting you guys negatively or --?

No, not that negatively. Yes. I think that you're going to see margins return to normal.

And as I said in my conference call notes, we're going to start making additional investments in marketing activity to drive topline at this point. And that could have some impact on margins as well.

Okay, great. That's all I have. Thanks, guys.

[Mike Satiri], private investor.

Hey, Wally and Rich, how are you doing today? (multiple speakers) Good. Rich, I don't know if you remember me from a call a long time ago -- we had joked about the websites, and you definitely have lived up to your promise of making the websites more aesthetically sleek. They look great.

Thank you.

Quick question. I want to go back to something we had talked about on that call as well. I'm wondering if you could give any more updates -- I know I am probably one of the investors that keeps hammering away at this, but how are we doing on babytobe.com? I noticed that there's been some changes on the website, and I slowly see some different content specifically focusing on the possibility of offering some support forums. And I can't tell if that's new, per se, or it's old content that existed previously. Do you have any comments on that?

Sure do, Mike. So, let me explain exactly what we did with baby.com. So, the site that you're referring to at babytobe.com, look at that domain as being orphaned. It's there and we own domainer content on it, but it's not generating any revenue for us and we are not spending any time on it. Now that being said, when we launched our health vertical, we repurposed all of the content that we had for babytobe under our health vertical. So if you go to the health site, you'll see (multiple speakers) a lot --

(multiple speakers) Yes, I see a lot of overlaps between the RF goals and -- yes, they're there. I see what -- you kind of migrated a lot of the stuff into it. I do see that, yes.

That's exactly what we did. And that's the way you should look at it. We really -- the ALOT sites is where we are spending our time, our activity, our money -- any of those old sites that we have, while they are still available and there. And in some cases, like babytobe, they might generate, I don't know, $100 a day or something, we don't spend any time on it.

Well, that would make sense as to why that's not listed on your website. Because I'm guessing -- on your -- actually your company website. (multiple speakers) So these are going to fall under the ALOT brand, eventually that site will just kind of drop off on its own?

Yes. (multiple speakers) There's no way to just turn it off, so we just leave it.

Right. My other question is, is how is Bargain Match going? Is that -- are you going to invest any more in that? Or is that, again, going to somehow migrate and be integrated into ALOT.com?

So we -- Bargain Match is another area that we stopped focusing attention on. And that was more just as a result of seeing success with the ONO strategy that we have. So you know what happens when you start latching onto a business model that's working for you, you tend to take all of the resources that you have elsewhere on activities that aren't generating as fast a growth or as margin and move them over. And that's what we did.

So -- well, put it this way -- Bargain Match got put on the back burner. Now, that being said, we may, at some point in the future, incorporate a shopping experience within the overall suite of ALOT sites. But for now, it's -- I would say it's on the back burner.

Okay. Do you guys have any plans -- and I think this was from feedback I'd given previously. One of the things I noticed, ALOT looks great, but there's -- it's very -- it's difficult when you are exploring content, when you're bouncing from health, finance, career, it's hard to get back to the homepage. Like, you know, ALOT.com. So I'm wondering if you guys would consider putting just a very -- and actually you have that. When you do a search there, there is a nice little icon that pops up. And so it brings you back to, like, a homepage. Do you know what I mean?

So as you navigate it, once you go on to health, it is difficult to get back to the original webpage itself, so without having to type it in again; there's no way to redirect. You know, like when we play on our computers, we have the home button, whatever that's set to whatever browser, you could just click it and it brings you back to whatever. So what I'm saying is (multiple speakers) that would be a -- I think that -- yes.

Yes, we are making a lot -- we continue to make a bunch of changes to the site, Mike, based on user feedback from people like yourself and users on the site. So I would suggest -- give me a call after this call or tomorrow sometime, and we can give you some more specifics on that. But we are always trying to improve that experience, of course. Right?

Okay. And then it looks like you guys are getting some nice downloads on Google Play. You released a recent one having to do with news.

Yes.

I just saw that added. So it looks like you're getting -- and also some of the weather stuff and the -- you have some apps on it that deal with picture editing. Looks like you're getting a lot -- sizable downloads of the mobile apps. Can you give any more kind of guidance in that area?

Do you -- I guess what I'm saying is, can we foresee one day those apps -- when you click on apps on ALOT.com, could it be possible someday that there will actually be those apps right there instead of going right to ALOT.com where you see the desktop apps? Do you understand what I mean?

Well, we're going to try and make it easy for people to consume our apps no matter where they land. I mean, Google -- the Google Play App Store or the Apple App Store are the places where so many people go. So there's a -- they're always going to -- we are always going to deploy them there, because that's where consumers ago. But the answer is yes. I mean, we're going -- we've said part of our strategy is to build and deploy, and make available to our users, mobile applications that are aligned with each of the verticals that we are in. And we are starting to do that as you cite, and you will see us do more of it.

Okay. Last question. It's kind of the elephant in the room -- shelf registration. You talked about raising some capital. And I know that there was -- you guys have had a shelf registration in the past. And you didn't really use that much of it. Can you provide any idea -- I mean, I know it's always there in terms of it went into effect, I saw the filing, the SEC filing. So you have set aside -- is it 15 million shares, to be accurate -- for the shelf registration (multiple speakers) if I understand you correct?

Yes. (multiple speakers) Yes, Mike, it's actually $15 million.

Oh. Sorry. Okay.

(multiple speakers) Yes. And just as you pointed out, that the shelf registration that we had was expiring this month in April. And all we did was keep it alive. That's it.

Okay. So it was wrongful to make an assumption that that shelf registration was somehow indicative of the extension that was given -- you know what I mean? The extension for the listing requirement. You could see how the investments (multiple speakers) make. So that's not connected in any way?

No. So, let me answer this. So I guess some people would make that extension but that's not the case. The shelf was expiring; we want to keep a shelf active. It's a prudent thing to do, so we basically just did what everybody does (multiple speakers) -- active. I think to the point of the Stock Exchange listing, Wally said in his notes that our shareholder equity is above the level that they -- that the New York Stock Exchange price is being required to maintain listing standards. So we believe we are in compliance.

Okay. Okay. And I said the last question -- this is the very last opportunity. Do you have any intentions of partnering? Maybe you can't name any specific companies, but do you have any future plans or anything that we can expect in the next years that you may actually have some announcements of partnering with varying companies that may fill in some of those marketing gaps, and fill in some other areas to help drive traffic?

No (multiple speakers) --

Not necessarily making any investments, but just partnering?

I don't -- if you're speaking specifically to marketing, I would have to say it's unlikely.

Okay.

It's not improbable but it's unlikely. And let me just explain why, because there's an important reason why. We believe that the machines that we have built on the O&O side include -- which includes the marketing machine we have -- is an asset, a technological asset, or a statistical-based technological asset. And we want (multiple speakers) to own and control that, so.

(multiple speakers) Richard, are you speaking of (multiple speakers) equipment --?

No. I'm just talking about the marketing activity that we do today to try to encourage consumers to visit our -- any one of our sites or our mobile applications, is a machine that we built (multiple speakers) technology.

So maybe more of a broader question then. Is there a potential in the next year that there may be some partnerships independent of whatever that reason might be?

Well, there's always a chance we might do partnerships that help us supercharge the business. There's not any, no, that I'm looking at in the foreseeable future.

Okay, great. Thank you, as always, for taking the time. I really appreciate it.

You bet, Mike.

Bye bye.

You bet, Mike.

(Operator Instructions). Gentlemen, I'm showing no further questions at this time. Please continue with any closing remarks.

All right. Thank you, officer. I'd like to thank everyone who joined us on today's call. We appreciate your continued interest in Inuvo, and we look forward to reporting progress over the coming quarter.

Thank you, sir. Ladies and gentlemen, that does conclude our conference for today. Thank you very much for your participation. You may now disconnect.