go2net.com
Go2Net Reports Profitable Fourth Quarter Results
Fourth Quarter Net Income of $.02 Per Share
SEATTLE, November 12, 1998 - Go2Net, Inc. (Nasdaq: GNET), a network of
technology and community-driven Web sites (http://www.go2net.com), today
announced operating results for the fourth quarter and fiscal year ended
September 30, 1998. Revenue for the three months ended September 30, 1998
was $1,955,243, representing an increase of 46.9% from the previous quarter
ended June 30, 1998 and a 530% increase from the comparable period for the
previous fiscal year.
For the quarter, the company reported net income of $130,545, or $.02 per
share, before non-recurring merger and acquisition-related charges. This
compares to a net loss of $400,746, or $.09 per share, for the comparable
period during the previous fiscal year. The non-recurring merger and
acquisition-related charges associated with the company's acquisition of
Hypermart totaled $319,512. Net loss for the quarter after these
non-recurring charges was $188,967, or $.03 per share.
For the fiscal year ended September 30, 1998, revenues were $4,830,882 as
compared to $528,595 for the previous fiscal year, representing an 814%
increase. Before non-recurring merger and acquisition-related charges and
non-recurring, non-cash charges, net loss for the year ended September 30,
1998 was $937,505 or $0.16 per share as compared to a net loss of $1,756,247
or $0.39 per share for the year ended September 30, 1997. Net loss for the
year ended September 30, 1998 after non-recurring merger and
acquisition-related charges and non-recurring, non-cash charges was
$2,371,125 or $0.41 per share.
Gross profit as a percentage of net sales increased to 71.6% and 62.7% for
the three months and fiscal year ended September 30, 1998, as compared to
69.0% and 56.8% for the three months and fiscal year ended September 30,
1997.
Basic net loss per share after non-recurring merger and acquisition-related
charges for the three months and fiscal year ended September 30, 1998 was
$0.03 and $0.41, respectively, as compared to a basic net loss per share of
$0.09 and $0.39 for the three months and fiscal year ended September 30,
1997, respectively. The number of shares used in the computation of basic
net loss per share for the three months and fiscal year ended September 30,
1998 were 5,869,714 and 5,781,937, respectively. The number of shares used
in the computation of the basic net loss per share for the three months and
fiscal year ended September 30, 1997 were 4,522,753 and 4,518,390,
respectively.
Go2Net CEO Russell C. Horowitz stated, "While Go2Net is still in the very
early stages of accomplishing its goals, we are pleased with the strong
revenue and traffic growth this quarter and particularly pleased with
achieving profitability. While we feel that the favorable results of
operations initially validates our business model, we are very much focused
on continuing to enhance Go2Net's overall market position through increased
reach and brand recognition. In fact, expanding recognition of the Go2Net
brand is one of our primary goals for fiscal 1999. To this end, we will be
increasing our marketing expenditures going forward, as well as expenditures
in other appropriate areas, as we continue with our growth strategy.
We will also continue to pursue acquisitions and other strategic
relationships to expand our product offerings and increase our reach, which
coupled with other expenditures, could affect short-term profitability. That
being said, we continue to see favorable operating trends for Go2Net
overall. In addition, our network is currently seeing record levels of usage
and favorable usage growth trends."
The Go2Net Network traffic increased 22% to 6.7 million average page views
per day during the month of September 1998, compared to 5.5 million average
page views per day in June 1998.
Go2Net's advertisers totaled 227 for the fourth quarter of 1998, up from 138
advertisers for the third quarter of 1998. As of September 30, 1997, the
total number of advertisers was 11.
During the September 30th quarter, the company closed its acquisition of
Hypermart, (http://www.hypermart.net), the Web's leading provider of free
business hosting services. Hypermart recently surpassed 100,000 member
businesses, which includes organizations and entrepreneurs from more than
235 countries. Since its acquisition by Go2Net in August, Hypermart's
membership base has grown at the rate of more than 400 members per day.
In addition to Go2Net's Seattle and New York offices, the company also
opened its Chicago sales office during the fourth quarter, and in November
is opening its San Francisco sales office. Other highlights included
co-branded games offerings with Mindspring and a co-branded MetaCrawler
search service with USA Today.
The company recently announced the selection of Seattle-based Hadley Green
Advertising for a series of national-level advertising campaigns to build
Internet industry and consumer awareness of the Go2Net Network. Go2Net's
first initiative began with a regional campaign to build awareness of
Go2Net's Silicon Investor (http://www.siliconinvestor.com) in the San
Francisco Bay Area business and media-buying communities. The Silicon
Investor push combined paid print and outdoor mobile advertising with direct
marketing focused on San Francisco's financial and agency districts.
Silicon Investor is the Web's largest financial discussion community, with
more than 6 million postings on the site since its 1995 inception.
Go2Net's advertising will extend nationally throughout the remainder of 1998
and into 1999, with strong emphasis on the Go2Net Network and the Go2Net
brand. Elements will include strategic national business, trade and
consumer media buys, market-specific focuses in major U.S. cities and a
variety of online advertising programs.
About Go2Net, Inc.
Go2Net, Inc. (http://www.go2net.com) is a network of technology- and
community-driven Web sites focused on the following categories: personal
finance, search, commerce, and games. The company also develops Web-related
software. The Go2Net Network's properties include: Silicon Investor
(http://www.siliconinvestor.com), the Web's largest financial discussion
site; StockSite (http://www.stocksite.com), which offers proprietary
articles, portfolio tracking tools, company research and news relating to
business and finance; MetaCrawler (http://www.metacrawler.com), a
search/index guide that combines various existing search/index guides into
one service (a "metasearch engine"); Hypermart (http://www.hypermart.net),
the Web's leading provider of free business hosting services; WebMarket
(http://www.webmarket.com), a one-stop comparison shopping service; and
PlaySite (http://www.playsite.com), a Java-based multi-player online games
site. The company's Go2Net Labs division develops innovative technologies
for use on the Go2Net sites and for licensing to other Internet companies.
This announcement contains forward-looking statements that involve risks and
uncertainties, including those relating to the company's ability to grow its
user and advertiser base. Actual results may differ materially from the
results predicted and reported results should not be considered as an
indication of future performance. The potential risks and uncertainties
include, among others, the company's extremely limited operating history,
the competitive environment in which the company competes, the early stage
of the Web as an advertising medium, the company's dependence on advertising
revenues and the company's dependence on strategic relationships to drive
traffic to its Web sites. More information about the potential factors that
could affect the company's business and financial results is included in the
company's Annual Report on Form 10-K for the year ended September 30, 1997,
and the quarterly reports on Form 10-Q for the periods ended December 31,
1997, March 31, 1998, and June 30, 1998, which are on file with the
Securities and Exchange Commission. |
