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L90 Concludes Internal Investigation, Restates Web ad network L90 has concluded the internal investigation of its accounting and said it plans to restate results for third quarter and full-year 2000, as well as first, second and third quarters of last year.

In February, the Los Angeles-based firm announced that the Securities and Exchange Commission and the Nasdaq exchange had begun an investigation into its finances, stemming from its past reporting of barter ad revenues as normal profit.

Specifically, the investigation -- as well as a concurrent internal inquest, which had been overseen by an outside accountant -- related in part to two barter advertising transactions with similarly-troubled Homestore.com during the second and third quarters of 2001.

During the federal investigation, regulators subpoenaed records and at least one member of L90's board of directors, the company said.

In addition to sorting out the Homestore transactions, L90 also said it would re-examine any other barter transactions in which it had been involved.

As a result of the internal investigation, L90 said it identified transactions during 2000 and 2001 involving multiple vendors and service providers, which "substantially offset one another when aggregated and appear to represent barter arrangements."

For the year ended Dec. 2000, revenue of $51.95 million would be restated as $48.7 million, while net losses grow from $19.7 million (or $0.92 per share) to $20.5 million ($0.95 per share).

For the first three quarters of 2001, revenue of $27.2 million will be restated as $22.2 million. Net losses now will rise from $22.4 million ($0.91 per share) to $21.7 million ($0.89 per share.) The decrease in the net loss is due to sales, marketing, general and administrative expenses being lower than previously stated.

While the internal investigation doesn't impact the SEC and Nasdaq inquiries, the company said it continues to cooperate fully, and is keen to put the episode behind it.

"We believe that we have identified and rectified these prior problems," said L90 General Counsel Peter Huie. "In addition, the company continues to work closely with special counsel to enhance and strengthen its internal controls and processes."

Huie also said L90 intends to file both its delayed 10-K annual report and its 10-Q quarterly report within about a week.

While the restatements are marginal, the debacle managed to claim the jobs of several of the company's top managers. L90 Chief Executive Officer John Bohan and Mark Roah, a founder and a member of the company's board of directors, each resigned in March. Chief Financial Officer Tom Sebastian was removed from his post shortly thereafter.

"The conclusion of our internal investigation allows us to bring closure to the questions surrounding L90's prior financial results," said L90 Chairman William Apfelbaum. "We are now moving forward to aggressively build our businesses on all fronts; our aim is to secure the leadership positions within our industry."

XadveRT Launches Rich Media Product

Toronto-based rich media ad firm XadveRT Corp. is going live with its eponymous product, which is aimed at increasing the effectiveness of animated Macromedia Flash ads.

The firm's product enables advertisers to change text, graphics and links within a live Flash ad campaign, in real-time. As a result, rich media banners could change their offer to reflect inventory levels, or on a pre-set schedule basis.

Conceptually, the product is reminiscent of efforts by Mediaplex to leverage its MOJO technology to create dynamically-generated ad content. Other startups, including the now-defunct HotSocket, also have dabbled in the field.

In addition to specializing in rich media, XadveRT said its level of customizability and ease-of-use are its main differentiators. The technology synchronizes with clients' databases and ad servers using XML, and is configurable using a customizable Web interface.

The firm said it is sales talks with several big-name clients, as well as with agencies and major ad servers for strategic alliances.

Yesmail Debuts B2B Product

Chicago-based e-mail player Yesmail is debuting a list of 8 million opt-in business addresses in what it calls its B2B Network.

The move represents an expansion for the firm into the B2B list market space, which Yesmail Chief Executive Dave Menzel called "a lucrative, new opportunity for marketers to target their business audiences and achieve better campaign results than they've seen with other B2B lists."

Yesmail, which is majority owned by Internet holding company CMGI , said the list's selects include SIC codes, company revenue, employees, purchasing authority and job titles -- similarly to offline direct lists.