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Tickets.com: Ready for a Ride?

Perhaps we should redefine B2C. That is, call it: business-to-calamity. No one likes B2C. In fact, it seems that the natural value of a B2C stock is in the single digits (or penny stock levels).

Yet, the concept of e-commerce still has validity. So, there are likely some nice bargains in the B2C space.

One that shows some promise is Tickets.com (TIXX). Like its B2C brethren, Tickets.com has collapsed. A recent IPO, the stock rose to a high of $32. Now, the stock is $5-1/16

Of course, the company's name speaks for itself. Actually, online ticketing is a fast-growing industry and it should continue to grow for many years. A key reason is convenience. Why wait in line? Doesn't it make more sense to research online and press a button to make a purchase?

Interestingly enough, Tickets.com is not a pie-in-the sky Net company. Rather, underlying the company is a brick-and-mortar operation. You see, before Tickets.com went public, it merged into a traditional ticketing business called Advantix. The company is a developer of proprietary software systems for entertainment organizations (over 4,100).

Actually, Tickets.com is a roll-up of a variety of ticketing companies. These include: Hill Arts and Entertainment Systems, Fantastix Ticket Company, ProTix, TicketsLive, and Lasergate Systems.

But Tickets.com is building technologies internally. For example, the company has struck a deal with ATM Tix that will turn Las Vegas ATMs into virtual "call" windows, where consumers can pick-up their tickets.

Another interesting deal is with Talus Solutions. Both companies will join to create demand driven pricing systems for the event ticketing industry. Just as the airline industry has so-called "yield management," so will the event ticketing industry. Currently, the industry uses a fixed price schedule.

In terms of the company's financials, there is traction. Tickets.com had $12.8 million in revenues in the fourth quarter, which was a 73 percent increase from the same period a year before. Of this, $2.6 million were online revenues. As for the losses, these were $18.1 million in the fourth quarter.

True, this sounds high. But, the company can afford the burn-rate. Besides raising substantial sums from its IPO, Tickets.com has received strategic investments from Excite@Home and Cox Media. At last count, Tickets.com had $94 million in its bank account. The market capitalization is $290 million. So, stripping out the cash, the ticketing business is being valued at about $200 million. At this price, it could be very attractive to a portal that wants to enter the ticketing business, say AOL or Yahoo!

Tickets.com also recently announced a partnership with Excite@Home where they are the virtual ticket box office for "Excite Events," an online venue where users can find information about local and national events. They also are the official ticket vendor for the 2002 Winter Olympic games and landed a 10-year exclusive ticketing deal with the San Francisco Giants.

Tickets.com also has lots of international possibilities. Recent international clients include Harbourfront Center in Canada, Sailsbury Theater in London and Reserveerlijn (Netherlands).

In all, Tickets.com delivers 8 tickets per second within its network. Forrester Research predicts online event ticketing market will grow from $300 million in 1999 to nearly $3 billion in 2004. And Tickets.com will be there with the infrastructure to ride this wave.

Is Tickets.com attractive to potential acquirers and investors at current levels? Discuss it here

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