Monday June 14, 6:51 pm Eastern Time
Go2Net sees operating income growing 20 pct - CEO
MINNEAPOLIS, July 14 (Reuters) - Internet network Go2Net expects pretax operating income to trend upwards about 20 percent over the next four quarters, Chief Executive Russell Horowitz told Reuters.
The company is comfortable with analyst projections that it will bring revenues of $22 million in calendar 1999 and $40 million in 2000, Horowitz said.
The company is aiming to secure over half of its revenues from areas other than advertising by the end of 2000.
Go2Net currently gets about 80 percent of its revenues from advertising, a less dependable revenue stream than its other areas such as subscriptions, e-commerce and licensing, Horowitz said Monday at an investor conference here hosted by U.S. Bancorp Piper Jaffray.
Go2Net had $4.8 million in revenue in its fiscal year ended Sept. 30, 1998, and lost $2.4 million during that period. In the quarter ended March 31, it had $4.3 million in revenue, approaching the whole of its fiscal 1998, and turned around its losses, earning $1.1 million.
Advertising will remain an important revenue stream. The site was the 19th most visited Web destination in April, according to Media Metrix, and aims to hit the top 10 this year, Horowitz said. The top 10 sites on the Internet capture about 70 percent of online advertising revenues, Horowitz said.
Go2Net is a conglomeration of Web sites including search site Metacrawler, finance chat site Silicon Investor and WebMarket, a comparison shopping service.
''General purpose sites are losing ground to the verticals,'' Horowitz said, referring to sites such as Go2Net which, rather than targeting a single broad audience, focus on specific areas. In Go2Net's case, those areas are finance, games, business-to-business services and search services.
The company aims to expand in both its current areas and into new ones, Horowitz said. Go2Net is sitting on a $310 million pile of cash, mostly from investments by Paul Allen, the Microsoft co-founder and current cable mogul. It is by far the largest cash position the company has ever had. Before the Allen investments Go2Net had about $12 million in its coffers, and had bought Web sites mostly with stock.
Go2Net expects to continue acquiring new Web sites that have self-sustaining revenue streams and new technologies that complement the stable of technologies Go2Net already has in house. In addition to its current areas, it is looking at complementary categories for acquisitions like travel and family.
It is also looking at offering the users of its popular Silicon Investor and StockSite services an integrated stock trading service, Horowitz said. The company is looking to be a premier portal for an era when cable modems and high-capacity telecommunications services allow for Web sites that do more and demand more network capacity.
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