Internet service firm Spike Networks, which is about to list on the Australian Stock Exchange, has based its future growth strategy on establishing a global presence with a youth-oriented internet radio station and a global network internet infrastructure to host content with joint-venture partners.
Spike, which will float 22.5 million shares in an A$32.6m ($21.5m) capital raising, has built its business to date mainly around the provision of internet services, such as web site development and e-commerce solutions, mainly to local corporate markets but with some successful forays into the US and Japan.
Its listing prospectus envisages 320% revenue growth in the current financial year to $20.4m thanks to the new business, with the lion’s share of the revenue coming from the US, which is expected to contribute about 50%, compared to 35% from the local market and 15% from Japan.
Central to the plan is SpikeRadio, with which it intends to build a global youth audience and in turn attract advertising revenue from multinational brands. Trevor Cain, of Sydney stockbroker PG Intercapital, was bullish about the company’s prospects telling the Australian Financial Review: Of the internet stocks out there, Spike captivates our attention because of its global strategy. Advertisers will pay for the opportunity to be on a global platform such as an internet radio station targeted at a youth market.
Here is an opportunity for the Cokes, McDonalds and Unilevers to get a global reach. If Spike gets this right it will be a massive opportunity.
