There has been a bit of fan-fare today regarding Wizzard’s press release about it’s Q2 2008 financial results. Both Paul Colligan and Podcasting News have highlighted the “bright” points of Wizzard’s press release. For those that think Wizzard is proof that podcast advertising is the answer I’d like to offer some context and thoughts:

• Wizzard reported gross revenues of $1,465,874 for Q2/2008 – how much is podcast advertising and how much comes from their original “core” business of speech technology? It is never defined. Don’t make the mistake of assuming it is all podcast related.
• Operating expenses for Q2 came down to $2,159,433 but things are still clearly in the red.
• Wizzard is a 12 year old company (founded in ’96) loosing millions per year.
• Wizzard makes no mention of their original business of “speech technology” in the substantive portion of their press release, it is all podcasting. What does that tell you?
• Wizzard is a public company with only an estimated $6M in gross revenues – would you invest? (You Can: WIZD)
• 3% revenue growth over Q2 2007. That is the nail in coffin. If they were in a mature industry such as the steel, oil or auto business that would be great, but an “explosive” growth segment such as New Media Advertising? You do the math.
• A reported 1 Billion downloads last year and only 13 advertisers secured by their “sales pioneers.” 13! That is 1 advertiser per 76 million downloads.

I know a lot of people see $1.4M in a quarter and think wow – that is a lot of money, but given expenses of $2.16M it is not. If they were a new startup it is one thing, but this is a “mature” public company 12 years in the making. I know some of the folks at Wizzard – they are energetic, enterprising and I have high expectations for their future accomplishments. Just make sure you read their press releases with a bit of contextual balance.

UPDATE: I had a nice conversation with Chris Spencer, the CEO of Wizzard yesterday. We probably chatted for a good 20 minutes. I’m glad we got the opportunity to meet each other, and enjoyed our exchange. I’m still looking for explosive growth in the segment. We’ll see what the future holds.