RealTime IT News

On the Record with Kenneth Cron

New media companies have watched their stock prices implode this year. It's the sector everyone now loves to hate. So can Uproar somehow survive this carnage?

A quick glance at Uproar's deeply depressed stock price of under $1 1/2 a share would suggest that Wall St. firmly believes that the company is a prime target for the dot com graveyard. Obviously, Uproar CEO Kenneth Cron vehemently disagrees with this doom and gloom conclusion. He may be right.

To be fair, it does seem too early to write off online entertainment and gaming company Uproar as a surefire "failure in progress". After all, the company ended last quarter with over $93 million in the bank and over 18 million registered users. In addition, the company is boldly declaring that it is on track for reaching the cherished land of profitability by the fourth quarter of next year.

If one looks even closer, Uproar is currently forecasting total sales of between $65 and $70 million for next year with losses of between $17 and $20 million during the same period. Of course, if these projections actually end up being met, it suggests that Uproar is currently trading for even less than one times next year's sales. Even after this year's dot com meltdown, that hardly seems pricey!

Of course, these are all just projections at this point, and as we have seen time and time again recently in the tech sector, online advertising supported stocks continue to be ravaged with earnings warnings and lowered expectations. "Predicting" and "executing" are too entirely different animals. That's why we recently caught up with Uproar CEO Kenneth Cron to hear how his company plans to meet its lofty estimates and outlast the recent advertising slowdown.

ISR: Let's start thing off with a brief overview from you of Uproar's network of sites and games that are offered today.

Cron: The Uproar network is composed of Uproar.com, iWin.com, iBetcha.com and Amused.com. So you have a cross-section really of single player and multi-player games with Uproar. These games are both public domain content like our very popular bingo and trivia games, as well as branded-content like "Family Feud", "To Tell the Truth" and "Name That Tune". Users can come on and play against one another, as well as compete for a variety of prizes and cash.

ISR: Okay. The online entertainment space has obviously witnessed a number of high profile failures this year like POP.com and Pseudo.com. Why have you been largely spared from these blowups?

Cron: When you take a look at what really allows Uproar to be so hugely successful, we really have created a formula for getting really large audiences of people to stay for a very long period of time. We do this with a combination of public domain content like hangman, bingo and trivia, and then we also offered unique branded content. Finally, we also offer some compelling original content at the tip of our triangle, which allows users to leverage the Net even further and do some really neat things. What we've really been able to do really well is to look at what people want the most and then deliver that. Ultimately, that's what a media company should do! It must grow its audience while also growing its revenue base.

ISR: And you obviously believe, then, that you're executing well on this vision of what a media company should do?

Cron: When we do these things right, which we believe that we do, you get the kind of sequential reduction in losses that we've seen each and every quarter this year. In terms of the fourth quarter, we guided the Street to top line sales of between $12 and $14 million and a bottom line loss of between $7 and $9 million. This will again be a smaller loss on our bottom line and a nice increase in top line sales.

ISR: Obviously, though, there remain a number of investors that are still skeptical about any future earnings and revenue projections made by online media companies