GoTo.com Reports First Quarter 2000 Earnings Revenue Growth of 29% from Prior quarter; 1047% Over First Quarter of 1999
Business Wire - April 24, 2000 16:48
PASADENA, Calif.--(BUSINESS WIRE)--April 24, 2000--GoTo.com, Inc. (NASDAQ: GOTO) today announced financial results for the quarter ended March 31, 2000. GoTo reported first quarter revenue of $17.2 million, a $3.9 million increase over revenue of $13.3 million for the quarter ended December 31, 1999, and a $15.7 million increase over the first quarter of 1999. For the first quarter of 2000, the company had a net loss of $9.0 million, excluding acquisition-related charges, which represents a pro forma basic and diluted net loss per share of $0.20. This compares with a net loss of $7.2 million and pro forma basic and diluted net loss per share of $0.17 in the previous quarter. GoTo.com had a net loss of $7.4 million and a pro forma basic and diluted net loss per share of $0.24 in the first quarter of 1999. Including acquisition-related charges, the company had a net loss of $30.5 million for the first quarter of 2000.
"We're very pleased with our first quarter results, which reflect continued growth powered by our unique business model," commented Ted Meisel, CEO of GoTo.com. "We're pleased to see our focus on serving affiliate partners with Web search pay off, and we look forward to making similar progress with GoTo Shopping and GoTo Auctions."
Growth in Key Metrics
Paid introductions, or paid clicks, represent the successful match of a consumer need with an advertiser offering. Paid clicks increased in the first quarter of 2000 to approximately 88 million, up from 73 million in the fourth quarter of 1999, and nearly 6 times the 15 million paid clicks in the first quarter of 1999. Advertisers paid GoTo an average of $0.19 for each of these introductions during the quarter ended March 31, 2000, up from $0.17 in the fourth quarter of 1999, and a substantial increase from the $0.08 average price per paid click in the first quarter of 1999.
At the end of March, GoTo had more than 25,000 advertisers, up from approximately 21,000 at the end of December 1999, and over 5 times the approximately 4,800 advertisers GoTo had at the end of the first quarter of 1999. GoTo estimates its audience reach to be more than 22 million unique visitors, which encompasses GoTo's home site as well as its extensive affiliate network.
GoTo.com Extends its Marketplace to Include Shopping and Auction Search
During the quarter, GoTo continued to expand its product offering beyond its core business of Web search. GoTo closed the acquisition of Cadabra, Inc., and launched GoTo Shopping, a comparison shopping service powered by Cadabra's parametric search technology. Further, GoTo announced the pending acquisition of AuctionRover.com, Inc., a one-stop resource for online auctions. With the addition of shopping and auction search capabilities, GoTo is building a comprehensive way for consumers to find the most relevant products and services across the Internet. GoTo's advertisers and merchants will be able to place search listings within GoTo's search results, place product shopping listings within GoTo shopping, and place products and services into the auction channel through AuctionRover, once the acquisition is completed.
GoTo Continues to Build Web Search Business
GoTo announced several significant milestones during the first quarter of 2000. New affiliate deals included partnerships with Go2Net, Microsoft, Mamma.com, and several other unique relationships, such as that with Searchbutton.com, providing a combined site-and-web search solution. Also, Earthlink came online in early January, delivering new traffic to GoTo as an affiliate partner under an agreement announced in October. To better attract and serve advertisers and small business customers, GoTo forged relationships with Onvia and SmartAge and also increased the scope of its Express Program, designed to help advertisers get started quickly with GoTo. GoTo has continued to build on its core Web search product, with the addition of directory-based results, making the search experience even more user friendly. In addition, GoTo earned a top relevancy ranking the recent NPD survey of search engines. Finally, in recent weeks, GoTo has begun to place additional focus on the business-to-business space, launching a new product, B2B Directory, which features links to sites that provide products and services used by small and mid-sized businesses.
About GoTo.com
GoTo.com (NASDAQ: GOTO) revolutionizes the way consumers and businesses find products, services and information, by operating a vast collection of vertical markets on the Internet. GoTo.com provides ecommerce services to Web sites across the Internet, including Web site search and comparison shopping (GoTo Shopping). GoTo.com reaches an estimated 22 million unique users through its tens of thousands of affiliate partners, including Earthlink/Mindspring, Microsoft, Netscape and Go2Net, and has more than 25,000 active, paying advertisers. GoTo.com is located in Pasadena, California and can be found online at www.goto.com.
Certain statements in this news release constitute "forward-looking statements." These forward-looking statements are inherently uncertain. Actual results may differ materially from these forward-looking statements due to risks such as: the risk that certain of the company's key performance metrics, including the number of paid clicks, average revenue per introduction, overall traffic to the site, and number of advertisers, might not continue to increase at historical rates; the risk of scaling operating infrastructure to support the GoTo.com service; the risk that the acquisition of AuctionRover.com may not be completed in a timely manner or at all; or the risk of integrating Cadabra, Inc. and AuctionRover.com, Inc. For a discussion of some of the other risks and factors that could affect GoTo.com's future results, see the discussion of "Risks That Could Affect Our Financial Condition and Results of Operations" in its Annual Report on Form 10-K for the year ended December 31, 1999.
GOTO.COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2000 1999
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 22,550 $ 11,914
Shortterm investments 69,275 93,409
Accounts receivable, net 3,349 2,927
Prepaid expenses and other 927 851
Prepaid marketing expenses 2,963 2,034
Total current assets 99,064 111,135
Property and equipment, net 18,889 12,703
Intangible assets, net 237,186 --
Long-term investments 3,733 4,932
Other assets 553 742
Total assets $ 359,425 $ 129,512
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,003 $ 10,465
Accrued expenses 7,448 2,562
Deferred revenue 2,463 2,058
Current portion of debt 100 131
Current portion of capital
lease obligations 780 754
Total current liabilities 20,794 15,970
Other long-term liabilities 1,279 --
Long-term capital lease obligations 578 768
Stockholders' equity:
Common Stock, $0.0001 par value,
200,000 shares authorized:
Shares issued and
outstanding -- 49,045 and
45,519 for March 31, 2000 and
December 31, 1999,
respectively 5 5
Additional paid-in capital
on Common Stock 412,893 158,799
Deferred compensation, net (2,159) (2,584)
Accumulated deficit (73,914) (43,405)
Unrealized losses on short-term
and long-term investments (51) (41)
Total stockholders equity 336,774 112,774
Total liabilities and
stockholders equity $ 359,425 $ 129,512
GOTO.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
Three Months Ended
March 31,
2000 1999
Revenue $ 17,215 $ 1,451
Cost of revenue 2,605 957
Gross profit 14,610 494
Operating expenses:
Marketing, sales and service 16,314 4,614
General and administrative 6,267 1,555
Product development 2,201 520
Amortization of deferred
compensation 425 1,297
Write-off of acquired
in-process research
and development 7,550 --
Amortization of intangible assets 13,954 --
------ -----
46,711 7,986
Loss from operations (32,101) (7,492)
Other income:
Interest income, net 1,547 132
Other income 45 --
Net loss $(30,509) $ (7,360)
Net loss excluding
acquisition-related costs $ (9,005) $ (7,360)
Pro forma basic and
diluted net loss excluding
acquisition-related costs
per share $ (0.20) $ (0.24)
Pro forma basic and diluted
net loss per share $ (0.67) $ (0.24)
Historical basic and diluted
net loss per share $ (0.67) $ (0.68)
Weighted average shares
used to compute
pro forma basic and diluted
net loss per share 45,323 30,387
Weighted average shares
used to compute
historical basic and diluted
net loss per share 45,323 10,894
CONTACT: Middleberg + Associates
Richard Berman, 415/693-9580
richard@middleberg.com
or
Rob Argento, 917/450-4319
rob@middleberg.com
or
GoTo.com
Kasey Byrne, 626/685-5766
kasey@goto.com |
