AskJeeves Reports Loss, Lower Sales
Wednesday April 25 7:41 PM ET
By Andrea Orr
PALO ALTO, Calif. (Reuters) - The Internet search service AskJeeves Inc. (NasdaqNM:ASKJ - news) on Wednesday reported a steep first quarter loss as well as a decline in sales, which it said partly reflected a collapse in online advertising rates.
The company also said it would cut its staff by 15 percent, or about 75 employees, to help conserve cash until it can generate a profit.
AskJeeves, which offers a user-friendly search service that responds to questions entered in plain English sentences, said it lost $14.40 million or 40 cents per share on a pro forma basis in the first quarter, compared with pro forma loss of $18.8 million or 59 cents per share in the year-ago period.
Most analysts who follow the company had been forecasting a loss of 52 cents per share.
Its revenues fell to $19.1 million from $23 million a year earlier.
In interviews after the results were announced, company officials said AskJeeves had witnessed a stunning decline in Internet advertising pricing, which dropped almost 50 percent between the end of the fourth quarter to the end of the first, and is down more than 80 percent from year-ago levels.
``Rates have come way, way, way down,'' said Steven Sordello, who has been acting chief financial officer and was officially named CFO on Wednesday. AskJeeves also formally named George Battle to the post of Chief Executive Officer.
In addition to the difficulties it faced on the advertising front, AskJeeves said its business solutions division suffered from the overall economic slump. AskJeeves operates both a consumer question-and-answer service that is supported by ads, and a business solutions division in which companies pay to license its technology.
Shares of AskJeeves, which had closed the regular session up 13 cents a share to $2.14, were a few pennies higher in after-hours trade following the earnings announcement. AskJeeves had at one point been a $169 stock. |
