I'm a Better Collective shareholder myself and I've been bullish for years.
However, I'm starting to grow concerned about the long-term impact of AI-powered search and chatbots like ChatGPT on content-driven platforms.
As these tools increasingly reduce the need for users to browse websites for information, we’ve already seen significant traffic drops for Tripadvisor (-33%), Wikipedia (-8%), StackOverflow (-50%), and a ~50% decline in Reddit’s share price, partly driven by this very concern.
How do you see AI-powered chatbots impacting Better Collective’s traffic mix and monetization model — particularly their reliance on organic search — in the short, medium, and long term?
Hi Martin. Super interesting question. The honest answer is that I simply don't know -- anyone who claims to would be lying. However, I don't think it is binary. I have tried to distill my thinking on the topic below, happy to hear your thoughts:
(i) I believe AI-powered search engines are solid contestants for static/low-stake answers -- i.e., "top-10 attractions in Lisbon", "how does cash-out work", etc. However, I think it is less useful (and therefore less prevalent) for queries that are of real-time or event-driven nature (e.g. news-/media-/entertainment). That said, it would be naïve to think BETCO is completely isolated from this both in the short- and long run. At that point, it becomes a question of whether the lost traffic was quality/"high-intent" in the first place, which is difficult to say given how new this phenomena is.
(ii) It is worth considering where the AI-powered search engines derive their knowledge from. I would think they operate with some sort of "trusted citation list" for specific types of content. Being on such list (which I don't see why not) could potentially *increase* traffic to their website. . In this context, it may be helpful that BETCO's media assets are "local champions" -- i.e. the AI-search counterparty would need to only deal with one counter-party for all of its local search queries. At this stage, I can see that BETCO's media assets are being cited a lot by ChatGPT, Perplexity, Gemini and Copilot (sourced from Ahref), but it is tough to say (a) how it will evolve over time, and (b) what impact it will have (i.e. more/less traffic).
(iii) While not something I would add as a point of conviction, there is an argument that regulators may want to curtail the power of AI search engines. After all, there are already stories of AI agents affecting informational diversity -- or even worse, selectively gatekeeping information that is not aligned with certain interests. In any case, this would likely be a slow process...
There are arguments for/against so I don't think of it as being binary. The net-net impact (on financials, that is) is too early to tell. To that end, the short-term repercussions are somewhat cushioned by the mix-shift away from CPA-derived sales, but that doesn't solve NDC deliveries (which is pivotal for RevShare). I will dig deeper into this and have posed a few questions on the matter to their IR in hopes of some guidance on how they see it. In any case it will likely be addressed at the Q2 call.
I had a meeting with management and posed questions related to, inter alia, AI search. I would say their answer is quite aligned with what I have put forth above. They did emphasize that they're working on a "promising" project internally related to AI, posed as "think of booking.com but for betting" by CEO. Basically routing bets placed on various platforms (already live on X, "Playbook"), including ChatGPT, etc. This is basically a way for them to leverage their existing network incl. integrations with sportsbooks.
On a separate note, it appears competition among sportsbooks in the U.S. is intensifying by the day (i.e., Kalshi and the likes taking share). The ability to place bets away from the respective sportsbooks will only add fuel to the fire, which should drive marketing spend upward. To that end, BETCO appears to have regained the FanDuel partnership, and also partners with alternative betting platforms like Kalshi. A power-shift could be brewing, though early to really say for sure. If true, timing is quite good considering the world cup is just around the corner.
Super gennemgang! Og fedt med opfølgning på regnskabet ovenpå dit første pitch. Jeg er selv tæt på at tage en position i Better Collective, så det er virkelig værdsat input.
Når det er sagt, sidder jeg stadig med et par ting, jeg ikke helt kan slippe:
OCF ser stærkt ud umiddelbart, men det virker som om det primært er drevet af udskudte betalinger og lavt CapEx. Jeg ser det ikke nødvendigvis som et tegn på underliggende momentum?
NDC-faldet på -30% YoY bekymrer mig også lidt. Jeg forstår godt forklaringen med svære comps og brasilianske bonusforbud, men det ændrer ikke på, at man har brug for konstant tilgang af nye spillere for at få RevShare-modellen til at opnå en compounding effekt over tid.
Jeg er stadig positiv på den lange bane, men synes der er nogle elementer i Q1, der godt kunne udfordres lidt mere i analysen. Jeg forventer at tage en begyndende position snart, og vil glæde mig til at følge udviklingen videre mod Q2 og håber på tegn på en re-acceleration.
Hi Silas. Thank you for the thoughtful input. I have taken the liberty to respond in English to ensure that non-Nordic readers can follow along!
As noted, H1-2025 will be inherently noisy with lots of moving parts to untangle. I completely get the hesitation — it’s not easy to follow. After all, muddy situations carry opportunities for those willing to dig a bit deeper. I believe this is one of such cases (not investment advice).
The below seeks to address your concerns one by one.
1. First, I think it’s important to clarify that OCF in Q1-2025 was supported by delayed payments from customers (I.e. "overdue receivables" from LY that landed in this quarter). That tailwind was partially offset by EUR 9m in overdue receivables (i.e. payments to the company that were expected in Q1-2025 but slipped into the next quarter). Net-net, it is just timing imbalances, but not recurring in nature.
As for the capex-level, please recall that the company has historically been highly acquisitive. So yes, Q1-2025 capex levels look very suppressed vis-á-vis historical figures, yet it is reflective of the company's shift toward organic growth. In that context, Q1-2025 is actually a reasonable proxy for steady-state capex (although it did contain EUR ~8m in deferred payments tied to past M&A).
2. Yes, the NDC step-down is not ideal. Yet, I believe the underlying reasons are well understood and are temporary in nature. As OSB penetration widens in LATAM and more U.S. states come online, I am confident that NDC volumes will re-accelerate. The timing is hard to pinpoint, but I would be *very* surprised if momentum has not returned by the 2026 FIFA World Cup. In the meantime, we are monitoring our ALT-data and keep a close watch on Brazilian regulation with regards to the ban of "welcome bonusses".
Hope that was clear. And once again, thank you for reading along!
Great analysis, thank you!
I'm a Better Collective shareholder myself and I've been bullish for years.
However, I'm starting to grow concerned about the long-term impact of AI-powered search and chatbots like ChatGPT on content-driven platforms.
As these tools increasingly reduce the need for users to browse websites for information, we’ve already seen significant traffic drops for Tripadvisor (-33%), Wikipedia (-8%), StackOverflow (-50%), and a ~50% decline in Reddit’s share price, partly driven by this very concern.
How do you see AI-powered chatbots impacting Better Collective’s traffic mix and monetization model — particularly their reliance on organic search — in the short, medium, and long term?
Hi Martin. Super interesting question. The honest answer is that I simply don't know -- anyone who claims to would be lying. However, I don't think it is binary. I have tried to distill my thinking on the topic below, happy to hear your thoughts:
(i) I believe AI-powered search engines are solid contestants for static/low-stake answers -- i.e., "top-10 attractions in Lisbon", "how does cash-out work", etc. However, I think it is less useful (and therefore less prevalent) for queries that are of real-time or event-driven nature (e.g. news-/media-/entertainment). That said, it would be naïve to think BETCO is completely isolated from this both in the short- and long run. At that point, it becomes a question of whether the lost traffic was quality/"high-intent" in the first place, which is difficult to say given how new this phenomena is.
(ii) It is worth considering where the AI-powered search engines derive their knowledge from. I would think they operate with some sort of "trusted citation list" for specific types of content. Being on such list (which I don't see why not) could potentially *increase* traffic to their website. . In this context, it may be helpful that BETCO's media assets are "local champions" -- i.e. the AI-search counterparty would need to only deal with one counter-party for all of its local search queries. At this stage, I can see that BETCO's media assets are being cited a lot by ChatGPT, Perplexity, Gemini and Copilot (sourced from Ahref), but it is tough to say (a) how it will evolve over time, and (b) what impact it will have (i.e. more/less traffic).
(iii) While not something I would add as a point of conviction, there is an argument that regulators may want to curtail the power of AI search engines. After all, there are already stories of AI agents affecting informational diversity -- or even worse, selectively gatekeeping information that is not aligned with certain interests. In any case, this would likely be a slow process...
There are arguments for/against so I don't think of it as being binary. The net-net impact (on financials, that is) is too early to tell. To that end, the short-term repercussions are somewhat cushioned by the mix-shift away from CPA-derived sales, but that doesn't solve NDC deliveries (which is pivotal for RevShare). I will dig deeper into this and have posed a few questions on the matter to their IR in hopes of some guidance on how they see it. In any case it will likely be addressed at the Q2 call.
Again, solid question.
Appreciate the detailed answer.
Any updated view on this?
You're welcome, thanks for reading along.
I had a meeting with management and posed questions related to, inter alia, AI search. I would say their answer is quite aligned with what I have put forth above. They did emphasize that they're working on a "promising" project internally related to AI, posed as "think of booking.com but for betting" by CEO. Basically routing bets placed on various platforms (already live on X, "Playbook"), including ChatGPT, etc. This is basically a way for them to leverage their existing network incl. integrations with sportsbooks.
On a separate note, it appears competition among sportsbooks in the U.S. is intensifying by the day (i.e., Kalshi and the likes taking share). The ability to place bets away from the respective sportsbooks will only add fuel to the fire, which should drive marketing spend upward. To that end, BETCO appears to have regained the FanDuel partnership, and also partners with alternative betting platforms like Kalshi. A power-shift could be brewing, though early to really say for sure. If true, timing is quite good considering the world cup is just around the corner.
Super gennemgang! Og fedt med opfølgning på regnskabet ovenpå dit første pitch. Jeg er selv tæt på at tage en position i Better Collective, så det er virkelig værdsat input.
Når det er sagt, sidder jeg stadig med et par ting, jeg ikke helt kan slippe:
OCF ser stærkt ud umiddelbart, men det virker som om det primært er drevet af udskudte betalinger og lavt CapEx. Jeg ser det ikke nødvendigvis som et tegn på underliggende momentum?
NDC-faldet på -30% YoY bekymrer mig også lidt. Jeg forstår godt forklaringen med svære comps og brasilianske bonusforbud, men det ændrer ikke på, at man har brug for konstant tilgang af nye spillere for at få RevShare-modellen til at opnå en compounding effekt over tid.
Jeg er stadig positiv på den lange bane, men synes der er nogle elementer i Q1, der godt kunne udfordres lidt mere i analysen. Jeg forventer at tage en begyndende position snart, og vil glæde mig til at følge udviklingen videre mod Q2 og håber på tegn på en re-acceleration.
/Silas
Hi Silas. Thank you for the thoughtful input. I have taken the liberty to respond in English to ensure that non-Nordic readers can follow along!
As noted, H1-2025 will be inherently noisy with lots of moving parts to untangle. I completely get the hesitation — it’s not easy to follow. After all, muddy situations carry opportunities for those willing to dig a bit deeper. I believe this is one of such cases (not investment advice).
The below seeks to address your concerns one by one.
1. First, I think it’s important to clarify that OCF in Q1-2025 was supported by delayed payments from customers (I.e. "overdue receivables" from LY that landed in this quarter). That tailwind was partially offset by EUR 9m in overdue receivables (i.e. payments to the company that were expected in Q1-2025 but slipped into the next quarter). Net-net, it is just timing imbalances, but not recurring in nature.
As for the capex-level, please recall that the company has historically been highly acquisitive. So yes, Q1-2025 capex levels look very suppressed vis-á-vis historical figures, yet it is reflective of the company's shift toward organic growth. In that context, Q1-2025 is actually a reasonable proxy for steady-state capex (although it did contain EUR ~8m in deferred payments tied to past M&A).
2. Yes, the NDC step-down is not ideal. Yet, I believe the underlying reasons are well understood and are temporary in nature. As OSB penetration widens in LATAM and more U.S. states come online, I am confident that NDC volumes will re-accelerate. The timing is hard to pinpoint, but I would be *very* surprised if momentum has not returned by the 2026 FIFA World Cup. In the meantime, we are monitoring our ALT-data and keep a close watch on Brazilian regulation with regards to the ban of "welcome bonusses".
Hope that was clear. And once again, thank you for reading along!
/Nordic Edge