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Update.com Shares Lose Half Their Value

[London, ENGLAND] On Europe's Neuer Markt, shares in Austrian software developer Update.com AG slumped Thursday after a report that second quarter sales were lower than expected.

At one point, the shares had lost over half their value, dropping to below $6, the biggest decline since Update.com went public in April this year.

A prominent developer of customer relationship management (CRM) software, Update.com had forecast sales growth of 30-40 percent for the April-June period. However, sales showed no growth whatsoever, resulting in the dramatic markdown of the share price.

Update.com's Chief Executive Gabriele Rittinghaus recently published a statement in the company's annual report promising to "continue to implement our growth strategy."

"Although the Neuer Markt has been weak in the last few months, our share price had risen by over 70 percent by May 12, 2000," wrote Rittinghaus.

Some analysts may think that the upbeat message was misleading, as it was in mid-May that Update.com reported the doubling of its first quarter operating loss.

Update.com's shares now stand at a level of over 70 percent lower than their price at their April debut.

The use of customer relationship management in e-businesses is at an all-time high. Earlier this week, late deals site lastminute.com announced technology partnerships to improve its CRM, while most major e-commerce sites now track their visitors and try to suggest alternative deals based on the information gathered.

Update.com blames the lack of growth on a staff shortage in its sales and marketing department and a failure to complete projects on schedule.