Online Ad Weakness: Kaboose Reports Lousy Q4

A public Canadian company called Kaboose (KAB.TO) that generates about $30-$50 million of revenue from a US web business (family-focused online media properties) reported a weak Q4. According to analyst David McFadgen at Cormark Securities, the weakness came from US online ad revenue, especially in kids-related advertising.

In the last recession, weakness in online advertising hit small, weaker companies first and the bigger, stronger players about 3-6 months later. We obviously don’t want to read too much into one report (the trouble could be Kaboose-specific), but this could be the first actual evidence of an online ad slowdown that we and others have been expecting to see since the economic weakness began.

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