MIVA, Inc. (NDAQ: MIVA) shares have been beaten down from their highs of almost $8 per share back in July to it’s current level of just over $2 per share on no specific negative news. The Internet company’s most recent quarterly results surely disappointed investors, but many investors and analysts insist that the sell off may be significantly overdone. So, are MIVA shares a buy at these levels?

MIVA has a lot of things going for it. First, its “Alot.com” toolbar initiative seems to be gaining a lot of traction. Alot.com is also showing improved traffic rankings and is now ranked higher than many other search portals like Looksmart.com and Local.com, according to Alexa’s traffic rankings. Moreover, over 7 million active users are also using its toolbar program. MIVA is entitled to profit sharing on any searches made from this toolbar to the tune of $0.10 to $5 per click depending on the search.

MIVA has also been caught under some litigation for click fraud and gambling advertisements that plagued other industry giants. Google and Yahoo announced that they settled by paying huge fines and setting aside additional funds, and many feared the the same conclusion may be reached by this company. Yesterday, MIVA announced that it had settled its litigation for only $1.3 million out of pocket, leaving its $25 million still in tact.

MIVA has also experienced problems in the third quarter with a decrease in revenue per click that its advertisers pay for traffic. Many believe that this is due in part to the quality of advertisers on its network compared to that of others like Google AdWords, Overture, or others. However, the value of this network in the event of a buyout would be apparent as the quality of advertisers would increase if it were purchased by a company like Interactive/IAC or CNET Networks.

In the end, there is a lot of value potential in this company. The company has $25 million in cahs, an add network that could be worth more than $100 million and a growing toolbar segment that is quickly positioning the company for profitability once again. Given these facts, one could reasonable see a valuation of at least $3 to $4 per share. Combined, this makes MIVA a stock worth watching!

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