IBG in 2005

The comparison to DGM is interesting. DGM were formed in 1999 and by 2001/2 had become solely focussed on their affiliate network business. However, the current structure of DGM has changed a great deal since moving onto AIM in 2003. It is obvious that the affiliate network is now only part of their business plan. It is not at all clear how big a proportion of their turnover is due to their affiliate network.

Since the reverse-takeover of IBNet, incorporating Webgravity the company have focussed more on becoming a 'one stop shop' for clients offering SEO, SEM, PPC, XML feeds, search reports etc... - i.e total campaign management. Contracts in this line of business can reach six figures for large blue chips and DGM have plenty of them on thier books. I wonder if the resignation of Nicky Iapino reflects the continuing move away from being focussed primarily on the affiliate network? DGM are big - they have offices in London, Spain and Australia and over 80 staff. They are currently looking to make further aquisitions in Europe to expand further.

I hold both shares as part of a portfolio aimed at taking advantage of the boom in internet advertising. To me, DGM is a safer bet, but the potential rewards appear greater for IBG if they can grow the business successfully and affiliate advertising remains strong.

I have the annual report and accounts for DGM in 2002, when they were focussed only on their affiliate network - the figures may be of interest:

Turnover: 3,499,434
Cost of sales (2,125,898)
Gross profit 1,373,536
Admin Expenses (1,310,997)
Operating profit 62,539
Profit after tax 44,752


Some links for DGM: