Wednesday, December 13

Stephane Malhomme – Cascades Stalled

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Citing difficulties related to currency fluctuations and rising costs of raw materials, Cascades announced results for lackluster first quarter, noting a decline in earnings, but also of its debt.

The company’s net income fell to $ 0 per share, compared with $ 0.22 per share for the same quarter last year. Invited on the air Silver Thursday, its chairman Alain Lemaire did not seem surprised. “The cost of raw materials hit a record this year, an increase that we have not reflected on the prices of our customers. The dollar has hurt us too, so it is clear that our earnings would fall, “he said.

Operating income before amortization (EBITDA) excluding special items was $ 78 million compared to $ 107 million in Q1 2009.

Asked about the share price of the Cascades, which sank $ 9.50 to $ 6.75 since the beginning of Mr. Lemaire remained philosophical, saying that he understood the current trend of investors, his company could boast of solid revenue, and debt under control. “We have nothing to be ashamed, and very confident in our ability to come back,” he said.

Mr. Cook says entrepreneurs should not expect immediate results. “Small business owners come to me, want a quick straight quote for a job, which is difficult. We need to look at their business, what keywords work best for them, what competition is out there on those keywords,” he says, adding small businesses usually come to him after they have invested in a Web site, and not seen any return. The last thing they want to hear is they may have to reinvest in redesigning it.

Migrating from the 20th page to the frontline can be slow. Mr. Duck’s business took about six months to appear at first rank on MSN’s and Yahoo’s first pages, and third rank on Google’s first page. Getting from the 20th result page to the 10th can be done quickly and cheaply. It is only by the end of the process, to the first pages, that expenses will rise and with them, returns. Mr. Cook estimates that you probably get ten times as many impressions on the first page compared to the second.

And once you’re there, little else matters. “When it comes to turning those impressions into clicks, appearing at the very top of the page may not always secure more clicks than say, the third position on that first page,” Mr. Cook says.

Mr. Duck estimates Skypole closes one deal a day through the Web site. The investment required to get there was “marginal compared to the sales it generated,” he says. “I was skeptical at first, considering the incredible amount of established competitors in Toronto. But I think I broke even on the investment in just two orders.”

Mr. Cook explains why the process takes time. “We tag every segment of clients’ pages with the keywords they want to be found under: titles, services, but also we include text files that contain those keywords, we rename pictures so that they also bear those keywords. We find all sorts of ways to multiply relevant keyword hits on each page of their Web site, to drive it to the front of search engine results,” he says. For example, if you type “SEO Toronto” on Google, Convurgency pops up first rank, first page.

Stephane Malhomme


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