to Miss Street Estimates for Q4

Incentive marketer said it will likely post a worse-than-expected fourth-quarter 2000 loss amid mounting expenses and continued difficulties with April’s Cybergold acquisition.

The San Francisco-based firm said it expects to post a net loss of $16.5 million to $18.5 million off revenues of $12.5 million to $14.5 million. On a per-share basis, that’s $0.41 to $0.46 — a sizable difference than consensus expectation of a $0.33 per share cited by First Call/Thompson Financial. had previously said it anticipated higher operating costs for the fourth quarter, but expenses were larger than expected due in part to integration costs associated with the Cybergold acquisition in April.

This marks the second consecutive quarter that executives have fingered that acquisition, and its integration costs, for having a negative impact on bottom-line results. The company said it does not anticipate any further costs for the acquisition’s integration.

The company also said executive recruiting fees and severance costs contributed to quarterly expenses.

“In a difficult market for Internet advertising, our core business of direct marketing by e-mail continued to perform well as the company enjoyed response rates among the industry’s strongest,” said president Layton Han. “As cost-cutting measures instituted in the fourth quarter gain traction and with the Cybergold integration behind us, we expect to lower operating expenses in the first quarter of 2001.”

Despite the revenue shortcoming, the company said it is working to diversify its client base, and counted Microsoft, Office Depot and Time Warner as fourth-quarter client wins.

The announcement continues the company’s string of tough news for investors. In third quarter, the company issued profit warnings, missed reduced analyst predictions, and cut 120 positions. Shortly thereafter, the company’s chairman, chief executive and president, Steve Markowitz, announced his resignation; Markowitz served as chairman until January, and currently serves on the board of directors. In December, chief operating officer Chaz Berman stepped down for what the company said were personal reasons.

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