IAR Bits and Bytes

24/7 Real Media Revenue Slips on Mail Unit Sale

Web ad server 24/7 Real Media posted results

in-line
with guidance, with revenue and losses slipping slightly due to the

sale of
its 24/7 Mail unit to Naviant in May.

The New York-based firm reported that revenue grew 7.8 percent from

last
quarter, to $10.2 million — not counting the first-quarter

contribution of
the recently sold division. Including revenue from the Mail business,

last
quarter’s revenue topped $10.8 million.

Net losses expanded to $4.2 million, or $0.08 per share, an increase

from
$3.7 million, or $0.07 per share last quarter. Had it not written down
$800,000 in asset losses due to the sale of 24/7 Mail, the company

would
have posted losses roughly flat with the previous quarter.

The company’s ad serving unit produced revenue equal to the previous
quarter, roughly $3.3 million. Excluding revenue from 24/7 Mail from

last
quarter’s numbers, ad sales and other marketing services — such as the

24/7
Website Results search marketing unit — increased about 12 percent.
(Including 24/7 Mail, revenue from the media unit decreased 2.5

percent.)

For next quarter, the company said it anticipates revenue to grow

between
5 percent and 10 percent, despite the seasonally weak quarter. With
operating expenses expected to be slightly higher — thanks to the

firm’s
efforts to launch its agency-side solution, Open Advertiser — 24/7

Real
Media said pro forma losses should remain in the $0.05 to $0.07 per

share
range.

“Our recovery is almost complete — and with the launch of Open
Advertiser in the next quarter, and improved market conditions, we

expect to
post continued, improved results in future quarters,” said Chairman and
Chief Executive David Moore.




ValueClick Integrates Be Free Ahead of Schedule, Posts Pro Forma
Breakeven

Westlake Village, Calif.-based ad server ValueClick
posted better-than-expected results for the second quarter.

The company said revenues rose to $14.1 million, a 14 percent

increase
from last quarter that included a full month of results from Be Free, a
recently acquired unit that ValueClick said it integrated more quickly

than
previously anticipated. Because of the unexpected inclusion of Be Free

in
the quarter’s results, revenues topped earlier guidance.

Net losses totaled $2.8 million, or $0.04 per share, slightly wider

than
last quarter’s net loss of $1.1 million, or $0.02 per share. In part,

the
increased losses include a restructuring charge of $2.3 million related

to
office consolidation.

On a pro forma basis, the company posted operating income of $19,000


roughly breakeven on a per-share basis. Last quarter, the firm posted

a pro
forma loss of $1.3 million.

“We are proud that despite the lingering softness in the market we

were
able to outperform our expectations in the second quarter, and that our

plan
for profitability in 2002 is on track,” said Chairman and CEO James

Zarley.
“After completing the integration of Mediaplex and the acquisition of

Be
Free ahead of schedule, we are focused on finding ways to rapidly grow

our
revenue and continuing our position as a leader in interactive

marketing
solutions.”

Zarley also said the company’s Board of Directors authorized an

increase
in the company’s stock buyback program to $50 million. The company

said it
has cash and marketable securities totaling $276.7 million.




IVillage Looks Beyond The Net

Women-focused online company iVillage is pinning

its
hopes on moving into the offline world.

In its second-quarter earnings report, iVillage said it would

continue to
explore non-Internet revenue opportunities, as it tries to buck a tough
online advertising market.

The company has a deal with Rutledge Hill Press to publish between

six
and twelve books a year, with the first four scheduled for release in

the
first half of next year. In addition, iVillage has begun to move into
endorsing lifestyle products, beginning with vitamins. The company said

that
over the next few weeks it plans to roll out 35 vitamins and

supplements to
sell on the iVillage site.

IVillage continued to make progress in trimming its losses. For the

three
months ended June 30, the company’s net loss was $3.6 million, down

from
$18.5 million in second quarter 2001. Revenues increased to $16 million

from
$11.4 million over the same two periods.

Two weeks ago, iVillage made waves by announcing it would cease using

pop-up
ads, which it said users viewed as unnecessarily intrusive. The company

said
a recent survey revealed that 92.5 percent of its users said the ads

were
the most frustrating part of using the Web.

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