Network Commerce to Shutdown ShopNow.com
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Amidst an announcement of revised revenue and net loss guidance for the fourth quarter 2000 and fiscal year 2001, Network Commerce revealed that it would shut down its consumer shopping network, ShopNow.com, during the first quarter of 2001.
In addition, the company announced further workforce reductions and other cost-cutting measures. One hundred and forty-five people, across all areas of business at company locations in Seattle, California, Georgia and the United Kingdom will be laid off. The Network Commerce UK sales office will also be closed.
According to company officials, Network commerce will continue to aggressively expand its Technology Infrastructure and Services business, including domain registration services, hosting services, commerce services, email marketing services and business services, which they expect to expand to more than 40% of revenues for 2001.
The company also generates revenue through its Portal Group, consisting of online sites and portals. As a result the company expects a gross margin of more than 70% for 2001.
With the increased margin and significant cost reductions, the company expects to achieve its previously stated goal of reaching pro forma profitability in the third quarter of 2001, and cash flow profitability by the fourth quarter of 2001.