As a former employee of and holder of 100 shares, worth a whopping 3090 SEK by end of business Wedensday, in TradeDoubler, I checked out the company's full year 2008 report.
Two quick thoughts:
* Overall gross profit (more or less revenue less payments to publishers) was up to 195 MSEK from 188 MSEK for Q4 and 747 MSEK from 636 MSEK for the year. I.e. underlying business is holding up pretty welll. Costs grew much faster, leading to a steep fall in all margins. TradeDoubler let 6 % of its staff go in Q4, but as management seems to be expecting relatively slow growth in 2009 it seems likely there will be additional cuts (either as additional cost-savings or by attrition).
* The acquisition and integration of IMW/Search Works has been a failure. It seems quite likely that TradeDoubler will have to take a very significant impairment charge on the goodwill from the acquisition, which likely would force the company to raise additional capital as equity could be wiped out. That is unless there is a heroic effort to cross-sell search/PPC services in Germany, France, Spain, Italy and Sweden, as it will be very hard to motivate 600 MSEK of goodwill even if EBITDA triples to 30-40 MSEK (as public Internet companies are valued at 8-20x net profit in this environment).
I hope TradeDoubler executes well in 2009 and that the postives (being performance-oriented) outweigh negatives (large share of revenue/gross profit in industries like consumer electronics, travel, finance).