Summary of earnings:

revenues: 4.99 million
average rpm: 5.87 (wiki) 5.89 (reference)
average page views daily: 6,336,000 (wiki) 2,965,000 (reference)

BAD news: they have lost the google account for definitions. This will impact revenues by approximately 5%.

GOOD news: traffic from Aug to Sep spiked 38%.

Predicted q4 revenues- $5.45-$5.95 million


Operating income, etc: I don't evaluate this part because it's basically unimportant in a high growth company. I do look at the balance sheet, and cash flow, which are better ideas of what's going on.
cash and equivalents: $21,344,000 ($980,000 higher than last quarter)


My Analysis:
Basically, I think the stock goes down today. They missed on revenues, and reported BAD news that was unknown to the market. The loss of definitions on google is a one time event, and that was not a growth market. The very low revenues in July and August are concerning as well. Other disturbing trends are the lower RPM's seen each quarter.

With that said, Answers.com continues to have impressive traffic growth. As long as traffic continues to grow impressively, this stock will eventually take off. It won't be today though...

The community of answers.com continues to grow by leaps and bounds. I hope management focuses more and more on quality of answers and user experience. I also hope they consider hiring a few "professional" writers for answers that could drive lots of revenues (banking, shopping, mortgages, etc...).

Answers.com stock price is still microscopic at this point for a world class site. Market cap of 80 million with 21 million in cash. The market cap could easily drop to 70 million today.

I don't think the market has priced in the traffic growth and traction answer.com is attaining. For that reason, I will continue to add to my position as the stock goes down today.