Team Internet's stock plummeted on Tuesday after Verdane announced it would not pursue an offer for the online marketing firm and downgraded its earnings forecast for the search segment. This news followed Team Internet's earlier announcement on January 7, where it revealed interest from TowerBrook Capital Partners and Verdane, both proposing a share price of 125p.

Shortly after, TowerBrook confirmed it would not make an offer, leading to a significant drop in Team Internet's share price. Despite this setback, the AIM-listed company expressed confidence in its business fundamentals, emphasizing its profitability and cash generation capabilities. Team Internet is actively exploring strategies to enhance shareholder value, including optimizing capital allocation and reviewing asset ownership.

The company noted ongoing interest in its Domains, Identity & Software (DIS) segment, which continues to perform well. However, it revised its earnings expectations for the search segment, projecting adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) for 2025 to be between $20 million and $25 million, a significant decrease from $57 million in 2024. This adjustment comes as Team Internet transitions to Google's new monetization product, Related Search On Content (RSOC).

In contrast, the adjusted EBITDA for the DIS and Comparison segments is expected to rise to between $40 million and $43 million, up from $36 million the previous year. Overall, the group anticipates a total adjusted EBITDA of between $60 million and $68 million for 2025, with expectations of returning to double-digit earnings growth by 2026.

Team Internet highlighted its readiness for the RSOC transition, which is seen as pivotal for transforming its search segment into a robust content and video publishing platform. The company acknowledged that while the market shift has been anticipated, the accelerated timeline presents challenges. It expects that during the transition, revenue from AdSense for Domains will decline more rapidly than the growth from RSOC, leading to a temporary dip in the financial performance of the search segment in 2025 before recovery begins in 2026.

As of 1000 GMT, Team Internet's shares had fallen by 37%, trading at 62.14p.