Lightspan to Focus on Earlier Profitability; Subscription Internet Sales Ahead of Expectations; Spending Reductions Implemented for Free Internet Site
SAN DIEGO--(BUSINESS WIRE)--Aug. 2, 2000--Lightspan today announced that the company is refocusing its K-12 Internet strategy to emphasize its subscription Internet services.
These include The Lightspan Network and eduTest Assessment, whose revenues are ahead of expectations for the current fiscal year. Lightspan Achieve Now, the company's CD-based curriculum software program, continues to show strong acceptance in schools across the country.
Lightspan now believes that it can achieve its Internet revenue goals from subscription sales alone for the current fiscal year, as well as FY2002. To this end, the company will significantly reduce spending to directly promote its free Internet site, Lightspan.com, to consumers. This highly popular K-12 educational portal will continue to be enhanced on a regular basis.
"We are seeing great customer acceptance of our subscription Internet services with many schools looking for web content to deliver on infrastructures that were installed with e-rate funding," said Carl Zeiger, president, COO and acting CFO of Lightspan. "We have decided to emphasize the subscription part of our K-12 Internet business and reduce the heavy promotional spending necessary to generate consumer traffic for our free site. These changes should allow Lightspan to focus on earlier profitability."
The expense reductions will come from eliminating marketing programs aimed at consumers and the positions associated with those programs. The reductions will begin immediately and should fully be implemented within the next thirty days.
"We're excited about our growing family of subscription Internet services which are essentially business to business (B to B) programs, that leverage our 200 person field sales and service team," said John Kernan, chairman and chief executive officer of Lightspan. "But like so many other Internet companies, we have just decided to stop spending the big dollars necessary to promote our business to consumer (B to C) free site."
Lightspan also announced today that Winnie Wechsler, its executive vice president and general manager of Internet Services, has decided to leave the company. "Winnie has done an extraordinary job for the company. In just a year and a half she has helped make Lightspan the leader in K-12 education on the Internet. While she will be sorely missed, I respect the decision she has made. I am confident that the team she has assembled for Lightspan will continue the successes we have achieved under her leadership," said Kernan. |
