Infoseek: higher revs, lower traffic
PALO ALTO, Calif., July 23 -ÿThe Internet search service Infoseek Corp. Thursday said that revenues more than doubled in its second quarter, but traffic to its Web site declined slightly. The company, which recently sold a 43 percent stake to Walt Disney Co., also reported an operating loss that was smaller than what most analysts were forecasting.
ÿ ÿ ÿ ÿINFOSEEK SAID its second quarter revenues totaled $17.1 million, up from $7.8 million in the year ago period. In addition, it said it had 671 advertisers, or 17 percent more than in the first quarter. Advertising rates averaged 7/10 of a cent per page view, up from 6/10 of a cent in the first quarter.
ÿ ÿ ÿ ÿInfoseek had a second quarter net loss of $1.3 million, or four cents a share, compared with a consensus estimate among analysts for a loss of seven cents.
ÿ ÿ ÿ ÿBut Infoseek said traffic to its Web site, which is one of the most popular gateways to the Internet, declined slightly. The site averaged 20.3 million "page views" in June, down from 22.1 in March.
ÿ ÿ ÿ ÿIn an interview after the earnings were announced, Infoseek President Harry Motro put a positive spin on the drop in traffic, saying it was all part of the company's plan to build up a strong brand identity rather than buy traffic from other Web sites.
ÿ ÿ ÿ ÿHe said the main reason its traffic fell was that Infoseek reduced the amount of traffic it purchases from Netscape Communications Corp. and undertook initiatives to build its own brand.
ÿ ÿ ÿ ÿNetscape has its own Web site which transfers incoming traffic to different search engines. During the quarter, Infoseek changed the terms of this contract so that it only gets 15 percent of Netscape's search traffic, compared with 35 percent before.
ÿ ÿ ÿ ÿ"A primary goal of the company is to build loyal, brand-aware traffic," Motro said.
ÿ ÿ ÿ ÿAlthough he declined to project how traffic would change in coming quarters, he said he saw strong upside from the collaboration with Disney.
ÿ ÿ ÿ ÿInfoseek and Disney are working to develop a new Internet service, or portal, offering a range of content and services. The new Web site, to be launched before the end of this year, will be the gateway to a number of popular Disney-owned online sites, including ABCNEWS.com and ESPN.com.
ÿ ÿ ÿ ÿ"This is certainly not the complete picture," Motro said, referring to the company's latest earnings, and the fact that its stock has failed to appreciate as much as some other high-flying Internet stocks.
ÿ ÿ ÿ ÿ"We probably have the most complicated story on the Internet and it may take some actual execution of our strategy for people to fully understand it," he said.
ÿ ÿ ÿ ÿ"We're focused on executing, and then we think the stock price will take care of itself." |
