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NetCreations Names New CFO, Lowers Q3 Expectations

Pointing to a drop in online ad spending, e-mail marketing specialist NetCreations has trimmed its third quarter profit outlook and announced the hiring of a new chief financial officer.

Already down 52 percent this year, shares in NetCreations took a nose dive yesterday following the announcement, dropping $8.88 to $12.00 by the close. In intraday trading, it set a new 52-week low of $11.69.

The company said it expects third-quarter revenues of $14 million to $15 million and profit of 4 cents a share to 6 cents a share. The results were less than expected, it said, without giving its prior forecast. NetCreations said its business is "on track" for the fourth quarter.

Internet advertising companies are facing the financial crunch as Internet clients slash marketing budgets and NetCreations chief executive officer Rosalind Resnick said the e-mail list management firm "is no exception."

"The third quarter has been a difficult one for Internet advertising companies, and NetCreations is no exception. Our revenues and earnings have been adversely affected by the decline in marketing-related expenses associated with our business-to-consumer dot-com customers as they are being forced to operate within increasingly tighter budgets in order to attain profitability," Resnick added.

Robert Mattes, a former comptroller at W.R. Berkley Corp. is the man tabbed to handle the financial troubles at NetCreations. Mattes was named chief financial officer, replacing Gary Sindler who resigned on August 15, to pursue personal interests in his native Baltimore. He had been serving as interim CFO since Sindler's departure.

"Rob Mattes is a top-notch financial professional and an asset to our senior management team. I feel confident that Rob will provide the financial leadership to guide NetCreations to continued growth and profitability," Resnick said.

Mattes, who spent six years in the audit practice at KPMG and four years in the insurance industry, joins NetCreations following a series of high-profile staff movement at the opt-in e-mail list manager and broker. In June, president and chief operating officer Mitchell York also stepped aside to assume the position of director.

NetCreations' clients include Dell, J. Crew, and Ziff-Davis, and the company has agreements with Web site operators like CMPnet and Regards.com to sign up users who wish to receive e-mail ads.