NetObjects Says It's Short on Cash
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Just two weeks after striking a deal with Hewlett-Packard, two months after announcing a joint Web services project with IBM and less than six months after selling off its enterprise business for $18 million, Web service platform vendor NetObjects (NASDAQ:NETO) announced yesterday that it does not have sufficient cash to continue operation through the end of its fiscal year (September 30).
The Redwood City, Calif-based company reports that as of the conclusion of the third quarter (which ended on June 30, 2001) its current liabilities of $7.8 million exceeded its current assets of $6.6 million. Its cash and cash equivalents totaled $4.4 million.
NetObjects has drawn positive reviews for Matrix and Fusion MX, its products that let small business build and manage Web sites.
In June, NetObjects announced the launch of services based on its hosted Web site-building platform Matrix. Its provider partners include LivePerson, NetLedger and MyComputer. Fusion MX allows Windows users to build Web with a WYSIWYG editor. The company claims it sold 10 million licenses to Fusion FX and claims that 5 million Web sites have been built with NetObjects projects. (The company was recently named a Top 20 Infrastructure Provider by ASPnews.)
While NetObjects technological sophistication is obvious, the company's future is not. "NetObjects has retained Broadview International LLC to explore options, which include the sale of NetObjects or a significant investment by a third party," the company said in a statement. However, while the company pursues those avenues it says it may be necessary to consider other "extraordinary measures" to preserve corporate assets. A company spokeswoman declined to elaborate on what that might entail.
Net loss for the third quarter of fiscal 2001 was $9.2 million or $(0.29) per share, compared to a net loss of $7.4 million or $(0.24) per share for the same period last year. The company's stock has a 52-week high of $5.62 and its prices hovered around 30 cents the day after it announced it third-quarter results.
IBM owns 48 percent of NetObjects. IBM officials were not available for comment.