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24/7 Real Media Revenue Slips on Mail Unit Sale

Web ad server 24/7 Real Media posted results in-line with guidance, with revenue and losses slipping slightly due to the sale of its 24/7 Mail unit to Naviant in May.

The New York-based firm reported that revenue grew 7.8 percent from last quarter, to $10.2 million -- not counting the first-quarter contribution of the recently sold division. Including revenue from the Mail business, last quarter's revenue topped $10.8 million.

Net losses expanded to $4.2 million, or $0.08 per share, an increase from $3.7 million, or $0.07 per share last quarter. Had it not written down $800,000 in asset losses due to the sale of 24/7 Mail, the company would have posted losses roughly flat with the previous quarter.

The company's ad serving unit produced revenue equal to the previous quarter, roughly $3.3 million. Excluding revenue from 24/7 Mail from last quarter's numbers, ad sales and other marketing services -- such as the 24/7 Website Results search marketing unit -- increased about 12 percent. (Including 24/7 Mail, revenue from the media unit decreased 2.5 percent.)

For next quarter, the company said it anticipates revenue to grow between 5 percent and 10 percent, despite the seasonally weak quarter. With operating expenses expected to be slightly higher -- thanks to the firm's efforts to launch its agency-side solution, Open Advertiser -- 24/7 Real Media said pro forma losses should remain in the $0.05 to $0.07 per share range.

"Our recovery is almost complete -- and with the launch of Open Advertiser in the next quarter, and improved market conditions, we expect to post continued, improved results in future quarters," said Chairman and Chief Executive David Moore.

ValueClick Integrates Be Free Ahead of Schedule, Posts Pro Forma Breakeven

Westlake Village, Calif.-based ad server ValueClick posted better-than-expected results for the second quarter.

The company said revenues rose to $14.1 million, a 14 percent increase from last quarter that included a full month of results from Be Free, a recently acquired unit that ValueClick said it integrated more quickly than previously anticipated. Because of the unexpected inclusion of Be Free in the quarter's results, revenues topped earlier guidance.

Net losses totaled $2.8 million, or $0.04 per share, slightly wider than last quarter's net loss of $1.1 million, or $0.02 per share. In part, the increased losses include a restructuring charge of $2.3 million related to office consolidation.

On a pro forma basis, the company posted operating income of $19,000 -- roughly breakeven on a per-share basis. Last quarter, the firm posted a pro forma loss of $1.3 million.

"We are proud that despite the lingering softness in the market we were able to outperform our expectations in the second quarter, and that our plan for profitability in 2002 is on track," said Chairman and CEO James Zarley. "After completing the integration of Mediaplex and the acquisition of Be Free ahead of schedule, we are focused on finding ways to rapidly grow our revenue and continuing our position as a leader in interactive marketing solutions."

Zarley also said the company's Board of Directors authorized an increase in the company's stock buyback program to $50 million. The company said it has cash and marketable securities totaling $276.7 million.

IVillage Looks Beyond The Net

Women-focused online company iVillage is pinning its hopes on moving into the offline world.

In its second-quarter earnings report, iVillage said it would continue to explore non-Internet revenue opportunities, as it tries to buck a tough online advertising market.

The company has a deal with Rutledge Hill Press to publish between six and twelve books a year, with the first four scheduled for release in the first half of next year. In addition, iVillage has begun to move into endorsing lifestyle products, beginning with vitamins. The company said that over the next few weeks it plans to roll out 35 vitamins and supplements to sell on the iVillage site.

IVillage continued to make progress in trimming its losses. For the three months ended June 30, the company's net loss was $3.6 million, down from $18.5 million in second quarter 2001. Revenues increased to $16 million from $11.4 million over the same two periods.

Two weeks ago, iVillage made waves by announcing it would cease using pop-up ads, which it said users viewed as unnecessarily intrusive. The company said a recent survey revealed that 92.5 percent of its users said the ads were the most frustrating part of using the Web.