RealTime IT News

Inktomi Posts Marginal Gains

Software development firm Inktomi announced Wednesday gains of $1 million in the fourth quarter, up from $39 million to $40 million.

Officials warned investors and analysts at a conference call Wednesday afternoon to expect continued minimal gains in revenues in Q2, with revenues in the $39-$41 million range.

Continued flat growth can be contributed mainly to the current downturn in the economy and companies unwilling or unable to "pull the trigger" and follow through with moneymaking projects.

"In the past, you'd hear a lot of 'I have the money in our budget to sign on to the project, but we're being told not to spend the money,' " said David Peterschmidt, Inktomi president and chief executive officer.

That makes it hard to project revenues for the future quarters, he said. "It's not actually visibility in the market today but predictability, the closure that stops all of us in the (high-tech) industry today."

The news certainly isn't an a stellar endorsement for investors looking to buy stock in the company, but is what, Peterschmidt said is a "solid foundation for our organization going forward."

"In the coming quarters, we will diligently work to demonstrate continuous improvement in our financials with key customer additions and the introduction of new network infrastructure software products that meet the demands of enterprises and service providers worldwide," he said.

Peterschmidt pointed to his company's success in the international market as one of the key elements for continued positive results in their caching software solution.

Their announcement Monday of a partnership with Fujitsu is merely one of many Asian contracts it expects to sign this year, while continuing to strike deals with European and North American companies.

"We have new solutions in the pipe for service providers and Web companies that has been met with a lot of positive results from our prospective customers," Peterschmidt said.

Net loss for the quarter totaled $7.7 million, not including employee stock compensation, goodwill and restructuring costs (mainly severance pay) associated with the divestiture of its commerce division this quarter.

The biggest gains at Inktomi came from its licensing division, made up primarily (85 percent) of existing customers upgrading and renewing their commitments with Inktomi. It's a good indicator the company's service is winning repeat business from corporations.

Inktomi's Web search division, which powers the search functions of major portals like America Online , MSN , Amazon , eBay and Wal-Mart , fell $3 million in the first quarter, attributable, officials said, to the demise of some of the smaller search engines in December, January and February.

Jerry Kennelly, Inktomi chief financial officer, predicts the company, even in light of current economic difficulties and its projected flat growth next quarter, will be able to break even financially by the end of the year.

"Even though revenue outlook is murky, I feel that at our expense level, we can find a break even quarter by the end of the year."