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CMGI Posts Profit

Its massive restructuring nearly complete, CMGI will emphasize product development, customer wins and smoother sales cycles, the Internet investor's new CEO said.

"While we must continue to be vigilant about cost containment, we are now focusing more significant attention and resources on growing revenue and supporting the expansion of our operating businesses," said CEO George McMillan, who succeeded David Wetherell on March 1.

McMillan's comments came as the Andover, Mass., firm reported a second quarter profit, thanks in large part to a one-time $133 million gain realized by retiring of debt held by Compaq .

CMGI posted net income of $15.2 million, or 14 cents per share, for the three months ended Jan. 31 -- vastly better than the $2.5 billion loss, or $7.79 per share, in the year ago period. Net revenue slipped to $210.8 million, from $342.7 million during the year-ago period.

However, the company, which owns search firm Alta Vista and online marketer Engage , among others, warned that full-year revenue would be just over $825 million, missing previous predictions of $900 million to $950 million. The company's fiscal year ends July 31.

It expects to exit the year with $275 million in cash, which could be used for acquisitions, said newly appointed CFO Thomas Oberdorf.

CMGI was a high-flier in the late 1990s when its Internet properties went public at a rapid clip. But when the dot-com crash hit, the company found itself over-extended and in possession of precious few money-makers.

Since then, it has jettisoned companies and workers that dragged on the bottom line. Its subsidiaries are now organized in three units: e-business and fulfillment (SalesLink, uBid); enterprise software and services (AltaVista, Engage, ProvisionSoft, Tallan, and Yesmail); and managed application services (NaviSite).

The firm also maintains a venture capital arm, @Ventures, but it is significantly less active than in past years, investing only $3 million last quarter.

CMGI's financial report was issued after markets closed. Earlier, CMGI finished down 0.11, or 6 percent, to 1.7. In the last 52 weeks, the issue has ranged from 0.6 to 6.5.