May 28 Millennial Media Inc may look
toward Latin American countries for acquisitions as it plans to
take advantage of a steadily growing mobile advertising market.
The company is interested in countries such as Argentina,
Brazil and Mexico, where it does not yet have a presence, Chief
Executive Paul Palmieri told Reuters.
Palmieri, who did not rule out such an acquisition in the
next 12 months, is also interested in buyouts in China in the
"Mexico and Brazil each have such a substantial number of
smartphones that it's absolutely exploding down there. And the
percentage of smartphone penetration in Argentina is hot,"
Millennial Media, which helps mobile developers and
advertisers to focus on smartphones, tablets and other mobile
devices, is the largest independent mobile advertising network,
ranked number 2 after Google Inc, according to market
research firm IDC.
Palmieri said the company, which posted a loss in 2012 and
the first quarter of 2013, will be profitable on an annualized
basis this year and throughout 2014.
The company's earnings quality score on Thomson Reuters
StarMine fell to 35 out of 100, from 53, after it reported its
January-March quarter. This compares with a sector median of 63.
The earnings quality model ranks companies according to the
sustainability of their earnings.
The company, which listed its shares at $13 on the New York
Stock Exchange in March 2012, was considered by analysts as one
of the most promising debuts last year.
Analysts have said Millennial could capture a major share of
the increase in mobile advertising budgets in an improving
economy but warned it faces stiffer competition from companies
like Facebook Inc.
Facebook's mobile advertising strategy gained momentum in
the March quarter as new types of ads designed for smartphones
helped lift revenue.
IDC forecast mobile advertising spending in the United
States to rise 55-65 percent to around $7 billion in 2013.
Millennial Media also faces competition from real-time
bidding platforms and companies that are a single point of
contact for desktop, mobile, and social advertising.
Real-time bidding technology, touted as the new growth
driver for mobile advertising, is like a stock exchange where
buyers bid for ad space according to visitors' profiles.
Shares of ValueClick Inc, an online marketing
services firm that also provides real-time bidding platforms,
have climbed 54 percent over the past year while Millennial
shares have dropped 50 percent.
Millennial bought Metaresolver in February to utilize its
platform that helps advertisers to buy and sell online display
advertising on multiple ad exchanges.
"One of the areas we are focused on in 2013 is making it
easier for clients to buy and transact on our platform,"
The company will add "exchange capability" on its ad
platform over the next few quarters that will offer ad buyers
the opportunity to buy ad space from developers real time.
As consumers increasingly surf the Web on the go,
advertisers are looking to ply them with targeted information
about nearby restaurants, theaters, shops and salons and
Millennial, with its vast trove of user data, can help buyers
make better real-time buying decisions, Palmieri said.
Oppenheimer & Co, which has an "outperform" rating on
Millennnial's stock, said these concerns will subside as the
company launches its own real-time-bidding platform and
continues to report financial results in line with outlook.
Four analysts have a "buy" or higher rating on the stock
that trades 28.4 times forward earnings, while four others have
a "hold" or equivalent rating. The sector trades 67.7 times
forward earnings on an average.
(Editing by Don Sebastian)