near all arguments of H.C. Wainwright lasten and the very good news from the patent-monetization are additional.
Not part of the valuation through H.C. Wainwright from September 4, 2014 are the news about the monetization of the Patent No. 7,062,453.
Local Corp had only started the monetizaton of patents with the following oldest patent of it’s 13 patents. No patents is capitalized in the balance sheet today, but only the following patent alone could have a value of 100 million..
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7,062,453
08/31/2000
In September, the lawsuit against Fry’s Electronics, Inc. regarding the infringement of Local’s U.S. Patent No. 7,062,453, which covers “methods and systems for dynamic networked commerce architecture” was settled to the mutual satisfaction of the parties, and Fry’s Electronics, Inc. agreed to license the patent. Local Corporation is continuing its efforts to enforce its intellectual property rights.
At the date of the publishing of the license an amount was not published, but now through the filing of 10 Q you can recognize the amount:
"Income from settlement and patent licensing
During the third quarter of fiscal 2014, we reached a settlement agreement in the patent infringement action against Fry’s Electronics, Inc. As part of the settlement agreement, we received a one-time patent license fee payment of $700,000 related to prior infringement of our patent."
But it will come a lot better, if you look at the following sentences of the CEO by the publishing of the license:
“We have identified hundreds of websites and applications that we believe infringe upon this patent and believe there are likely thousands more. We have set a clear course to begin the process of licensing this patent. Overall, we currently believe that a conservative estimate of potential future licensing fees that could be from this patent is $100 million. We believe we are well-positioned to explore the monetization of our other patent families as well, including our pay-per-call patents.”
Not complete continue for the following argumentation: “….and new strategic initiatives that should boost organic traffic and revenues and allow for stronger margins.” The fight against fraud decreased the network-traffic and revenues with its high margins. But invest in the quality of traffic will increase the revenues in the future:
• Network Traffic Quality Improvements: During the third quarter, the company developed a traffic quality solution, nTegrity, which it believes will better protect advertisers from fraudulent traffic types such as programmable headless browsers, BotNets and JavaScript manipulation. Launched in the fourth quarter, nTegrity will be used to detect, analyze and decide whether or not to show ads from the company’s ad partners on a real time, impression-by-impression basis, using an array of proprietary and third-party tools. The company expects nTegrity to increase conversion rates for advertisers and expects advertisers’ spend with Local Corporation to increase in turn.
And Local Corp is very excited about our early results with nTegrity. .
For example these argument continue and additional positive had happened: “LOCM is in the early stages of implementing a new business strategy that over time should make the business less dependent on its traditional partnership-driven, search monetization model.”
Additional positive since early September:
• Mobile Search Advances: The company is implementing its nQuery solution with a top five global carrier. nQuery is already deployed with a major U.S. mobile carrier, 18 international and prepaid MVNOs and 10,000 U.S. hotels. Providing a custom, hosted search solution, nQuery now powers millions of search queries globally. The company expects to further grow nQuery via partnerships with entities that specialize in monetizing subscriber traffic for mobile operators and Wi-Fi networks.
• Successful Programmatic Launch: The company entered the programmatic media marketplace to leverage its robust local audience data and connect advertisers with real people in real time, on the right platform. The company’s valuable, high-intent, first-party consumer data, includes behavioral, geo and device attributes from its 20 million monthly unique visitors across its O&O properties. The company anticipates this will enable additional scale over time, as any number of publishers can access multiple advertisers and multiple, targeted ads based on specific interests.
• Local Content and Search Engine Marketing Expansion: This quarter, the company continues to ingest new category data from additional sources, while adding content partnerships for its O&O properties. The company is also initiating additional keyword campaigns, vertical categories and rich content enhancements. Together, management believes these will increase traffic.