fsa investigation?
ADVFN PLC
24 November 2006

ADVFN PLC (the 'Company')

Exercise of Options

The Company announces that options to subscribe for 150,002 ordinary shares of
one pence each in the Company have been exercised at a price of 1.25p per share.
These shares have been allotted and application for the shares to be admitted to
trading on AIM has been made to the London Stock Exchange. Admission of and
dealings in these shares are expected to commence on 1 December 2006.

looks like AFN is going bust...Chambers looking for another gravy train

Maestro

Do these one liners of yours come to you in any particular form or is it totally down to insider knowledge. Their accuracy is so spellbindingly poor that I often wonder if QXL was just a lucky guess, as opposed to all your unlucky ones. LOL

bloomers..why do you think they have moved offices to ONGAR?...hardly the action of a successful company...not exactly a prestigious location is it?

dead cat bounce before the lights go out

Goldfinger,

I think it's a question of who blinks first!

I totally agree, the site that brings down level ll prices to a lower level will generate a lot more traffic IMO, especially if it was bundled with a premium BB membership package.

I would imagine a price of £20 would seriously increase takeup, and any fall in profits could be offset by imaginative use of the increased numbers and hits.

I invest rather then trade, (in theory at least!) so in practice don't have much requirement for level ll, but would subscribe at a lower price.

I think MAM has missed an opportunity since inception to make itself a more serious competitor to ADVFN, and continues to do so.

Quite why MAM or Sharecrazy don't think outside of the box a bit more is puzzling, and MAM are not even leveraging their relationship with Shares either IMO.

Your broadband analogy is a superb example of increased takeup of a product as the price has fallen.

let's hope somebody is listening!

Yes fingers crossed andy.

They're all watching each other like hawks frightened to make the first move but each one secretly hoping that the other does.

I am certain that a well thought out package of charges, whereby everyone pays their little bit would be a great success. You can't keep asking shareholders to foot the bill for expansion, whilst 95% of users do so free of charge especially when revenues, at present, are insufficient to break even.

bloomers,

Good post, I agree such a package would work IMO.

some mug bought 450k...one born every minute

Was it you?.

no i bought at 2.7p ;-)

I'm intrigued by some of this discussion over Level II and profit margins. I don't have any special insight into MAM or ADVFN's finances, but what makes you think that they're not trying to be competitive?

The Exchanges regulate the basic price per user of Level II, the feed suppliers charge a fee on top on that, then there is significant capital investment in hardware and software to present the data in a palatable form, there are running costs associated with hosting the servers and monitoring and updating the service.

I think you will find that, without advertising revenue, the service could not be provided at all.

MM

"I think you will find that, without advertising revenue, the service could not be provided at all."

I am not saying that ADVFN is not trying to be competetive and the above sentence from you is totally correct, but there are other ways of funding and generating revenue which, at present, ADVFN fails to acknowledge as a viable proposition.

The main argument in respect of this is to charge everyone who uses it's site a membership fee, and that includes all it's integrated sites, in order that it will have a regular basic income year on year with which to maintain and improve the site. Anything charged beyond that would be a bonus.

At the present time shareholders are bearing the brunt of paying for the huge majority of users who pay nothing, but nevertheless expect the information to be there as and when they want to refer to it.

This has resulted in, and will continue to mean, further share issues and thus dilution of shareprice because current policies are not generating enough revenue from advertising and premium user payments to cover the current expenditure. It is also a dangerous game to have all your eggs in just two baskets especially when, if looked at in line with pure economics, those two baskets are likely to be affected by the same economic slowdowns at the same time.

With an effective revenue stream from membership fees, in which every user pays a little bit, it would be easier to re-structure premium rates in order that they are within a scale that ordinary investors find acceptable.

I'm all for competition, the secret is knowing the strength of the opposition, in relation to the particular product you are offering, and the faith that you have in that product and it's ability to impress the people you are trying to sell it to.

Once you have satisfied yourself on those points there shouldn't be a problem as, IMHO, users will not desert the best site, for a worse one, for the sake of a few quid a year.

So what is wrong with a service which charges a membership fee, charges premium rates for some of it's services and advertises to it's full capacity and finds any other ways of extracting a few quid out of it's USERS as opposed to constantly screwing it's SHAREHOLDERS.

Charging everyone membership would result in the death of the free BB as very few would pay, and with it the bulk page impressions that generate advertising revenue. An exclusively paid-for site would have much reduced revenue from advertising. The balance of free and paid-for BB and services is probably about right on ADVFN and here.

Haystack

We pay for everything else in this world but I would be interested to know if you are a shareholder in ADVFN. If No

Then I would ask if you are a shareholder at all. if yes

Does the company you are invested in provide it's services free of charge.

As for having a much reduced revenue in advertising, what is generated now is not enough and there is no guarentee that it ever will be. So why do they keep repeating the same model, which has yet to show a profit, over and over again.

That is taking unecessary risk especially when they have had the perfect opportunity to try something different on recently opened, but previously untried, locations, namely Brazil, China, Japan.

There are also those among us who do nothing but continually abuse the free BB system so let's not go too overboard on that score. They are the ones who would not pay because half of them couldn't afford all the names they have.

MM,

I was at a presentation at the LSE and someone made the statement that providers were charging too much for level ll.

I would love to see what would happen if they reduced the price, and tried the 'pile em high sell em cheap' sales method, rather than price it out of reach of the average investor.

bloomers

Plenty of companies in the computer and internet world provide some of their services for free. It is done for lots of reasons and has been shown to be a good business model. Take Sun for example - Java is free to download and use, Microsoft provide many of their features for free download. Many of us are used to freeware software and shareware.

It is unlikely that there would be enough paying members for ADVFN's premium BB. I started out as an ADVFN Premium BB member in 1999 and never did see any sign of any interest in people paying to be there. I rarely used it as there is almost no activity on it. If ADVFN started to have only paid-for services then the free members would just go elsewhere, such as to iii or here for instance. The economics of these financial web sites is more complicated than just paid-for members. Financial web sites get substantial incomes from providing services and data to third pary corporate clients. That is the area where revenue growth will come from.

As Andy and I have pointed out before the first one to break rank over level 2 prices will gain a foothold in the market and at the same time I feel will create a price war.

From there onwards the wholesalers will have to reduce prices.

Looks good to me.

If the LSE are going around saying that providers are charging too much for level 2 then that is a little strange. I was under the impression that the main cost for a level 2 provider was actually the licence fee to the LSE.

The document listing the licence fees payable to the LSE is this one, and I should think that the licence fee of 10,000 or 44,000 plus 15 per terminal (simultaneously connected user) would apply.

ADVFN and MoneyAM just purchase licences for the maximum number of users connected at the same time rather than the total number paying for level 2, but bearing in mind that each provider only has a few hundred or thousand paying level 2 users, the fees are still not trivial and of course from the profit margin the whole website and staff have to be paid for.

Haystack has hit it pretty much on the head though. There is little money in selling price information however you work it. There are only a few thousand private investors in the UK who actually require level 2 type information and no one is going to pay a ha'penny for the 99% cr*p that appears on the ADVFN free BB. Make people pay for the BBs or for basic price information and page impressions would literally be decimated, if not more, also decimating advertising revenue.

ADVFN's solution (or perhaps their desperate attempt to make money somehow) is to spread themselves far and wide, certainly at great investment cost, though it is not obvious to me why the services are being provided free of charge overseas. One would assume that in other countries, with different market forces, one could get away with charging for information. In the UK the number of people willing to pay for market information is much, much smaller than most people think.

I have always advocated that any fee charged would be for the maintenance and updating of the site and would include all day streaming in the package. Cut out the choice of whether a member pays or not each and everyone pays something.

Those who leave the site, from what I have seen, would soon return.