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FOCUS-Internet firms' losses smaller than expected
Reuters Story - July 17, 1998 03:55
By Susan Moran
PALO ALTO, Calif., July 16 (Reuters) - Two Internet
darlings, Excite Inc. , the second-largest Internet
directory company, and Inktomi Corp. , a network
search-engine company, reported smaller losses for the latest
quarter Thursday, surpassing Wall Street estimates.
Excite, which like its archrival, Yahoo! Inc. ,
began as a basic search engine and has morphed into an Internet
"portal" offering news, stock data, shopping, chat, e-mail and
other services, attributed the slimmer loss to surging sales
from banner ads, transactions and other sources.
Sales were spurred in part by Excite's pact with Netscape
Communications Corp. , in which the two companies are
co-branding various services on Netscape's NetCenter Web site.
Excluding charges, Excite posted a loss of $4.6 million, or
10 cents per share, vs. a loss of $6.4 million, or 26 cents a
share, a year earlier. That accounts for a two-for-one stock
split the company made last month. The Wall Street consensus
was for a post-split loss of 21 cents a share.
Including one-time items, however, Excite posted a loss of
$80.2 million, or $1.72 a share, compared with $11.4 million,
or 46 cents a share, in the year-ago period.
Let's get real folks
Total revenues for Excite, which is based in Redwood City,
Calif., more than tripled in the quarter ended June 30, to $33
million from $10.1 million in the year-ago period.
About half came from banner advertising, about 25 percent
was commerce-related -- from so-called sponsors as well as
shopping transactions -- and the rest came from a variety of
sources, including Netscape's NetCenter site, which was
launched in June, according to Excite President George Bell.
"The revenue growth was very gratifying because it was so
broad-based," Excite's Bell said in an interview.
Asked about prospects for overtaking top-ranked Yahoo, he
said: "We finished a strong No. 2. But part of the story that's
not been told is the distance we're putting between ourselves
and others behind us."
Excite booked $113 million of new business contracts in the
second quarter, bringing the company's total backlog as of June
30 to $250 million, up 60 percent from March 30.
Its network traffic, a key measurement of commercial
success in cyberspace, rose to 44 million page views per day in
June, up 10 percent from March levels, and the total number of
advertisers rose to 819, up 31 percent from the first quarter.
"Excite had an excellent quarter, truly outstanding, given
the amount of new products they launched in the quarter and the
lauching of Netscape's NetCenter portal site," said Andrea
Williams, an analyst at Wolpe Brown Whelan, an investment bank
in San Francisco.
Meanwhile, Inktomi, of San Mateo, Calif., reported a net
loss of $4.7 million, or 24 cents a per share, for its fiscal
third quarter ended June 30, vs. a loss of $2.1 million, or 17
cents per share, a year ago. Wall Street analysts had expected
a loss of 26 cents a share, according to First Call.
Revenues more than quadrupled to $6.3 million from $1.5
million, according to Inktomi, whose highly respected
technology now powers many of the leading Internet directories
and other sites.
Excite's and Inktomi's results followed a sharp rise in
operating income reported earlier this week by Yahoo, which
also blew past analysts' estimates.
Excite stock, which has gyrated wildly recently along with
other Internet stocks, closed up $3.375 at $91.625 on Nasdaq
ahead of the announcement but fell to $90 in after-hours
trading. Inktomi shares edged up 62.5 cents to close at $67.94.
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