2 Red-Hot Business Internet Plays

04/14/2011 12:52 pm EST

Focus: STOCKS

James Oberweis

President, Oberweis Asset Management, Inc.

There’s plenty of money to be made from helping businesses take full advantage of the Internet, and Interactive Intelligence and Web.com are making it, writes James Oberweis, editor of the Oberweis Report .

Interactive Intelligence (ININ) is a global provider of unified business communications solutions for contact center automation, enterprise IP telephony (calls over Internet), and business process automation.

The company is benefiting from both a contact center upgrade cycle along with a corporate shift to all-IP networks.

Large contact centers use ININ’s solutions to help customers lower costs while managing multiple communication channels. The company also announced a new hosted offering in 2009, referred to as their Communications as a Service (CaaS) product offering, which is experiencing very robust demand.

In the company’s latest reported fourth quarter, sales increased approximately 41%, to $50.7 million, from $35.9 million in the fourth quarter of last year. Interactive Intelligence reported earnings of 54 cents per share in the latest reported fourth quarter, versus 28 cents per share in the same quarter of 2009.

Please note that the earnings estimate for 2011 reflects a significantly higher tax rate than was in effect during 2010.

Web.com Group (WWWW) is a leading provider of Internet services and online marketing solutions that enable small businesses to build and maintain an effective online presence.

Its primary service offerings, eWorks! XL and SmartClicks, are performance-based packages that include Web site design and publishing, online marketing, advertising, search engine optimization, lead generation and Web analytics. Web.com offers these services and products on a subscription basis.

Additionally, in July 2010, the company completed the acquisition of Register.com, a provider of global domain-name registration and complementary Web site design and management services. Collectively, Web.com and Register.com offer a full range of Web services, and Web.com is attempting to cross-sell its Web site services to Register.com customers.

The company has also launched its Facebook Company page offering for $40/month, which is targeted to local companies interested in shifting advertising to social media platforms.

In the company’s latest reported fourth quarter, sales increased approximately 43%, to $37.6 million, from $26.3 million in the fourth quarter of last year. Web.com Group reported earnings of 24 cents per share in the latest reported fourth quarter, versus 16 cents per share in the same quarter of 2009.

[Interactive Intelligence is up 44% this year, while Web.com has jumped 66%. For another momentum pick from the same fertile patch, see the recent Timothy Lutts profile of Constant Contact (CTCT)—Editor.]

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