WebSideStory is moving toward its initial public offering, but to make it more attractive, they say, they're going to drop one of its key moneymakers: selling banner ads for adult Websites. The company is hoping to raise $58 million with its IPO and is moving away toward selling advertising as a whole, not necessarily singling out adult Website ads.
"In late 1999," says WebSideStory's IPO filing with the Securities and Exchange Commission, "we adopted policies designed to eliminate all revenue from adult advertising on our websites and we anticipate the elimination of such revenue from sales of advertising for adult content sites in the near future."
The move makes sense, according to analysts cited by Wired and other Internet-oriented publications, because the top investment banks tend to shy away from working with or representing those in or allied with the adult entertainment business.
"Adult entertainment has never been accepted by the underwriters," said WorldFinanceNet research director Irv DeGraw. Wired says investment banks "avoid the adult entertainment industry out of fear of drawing ire from big institutional clients like teacher pension funds, who might not approve of such investments."
WebSide Story, predominantly a traffic tracker, wants to move toward subscriber-oriented business.
In a somewhat related development, Starnet - the online gaming specialty company - said last week it had finally finished selling off its adult entertainment division, which it had been trying to do since the fall of 1999. The company is also preparing for its own initial public offering and plans to trade on the high-tech NASDAQ stock composite.
