Earnings: Ask Jeeves, aQuantive, Digitas

Ask Jeeves Hits Home Run

Second-tier search engine Ask Jeeves knocked one out of the ballpark, more than tripling its fourth-quarter profit thanks to increased ad sales.

The company’s shares rose 608 percent in 2003 and it also increased its forecast for 2004 profit and revenue when it reported earnings Wednesday. For 2004, Ask Jeeves forecasts revenue of $142 million, up from its previous estimate of $135 million.

Fourth-quarter profit was $7.6 million, or $0.13 cents a share, compared with profit of $2 million, or 5 cents a share, a year ago. Revenue rose 58 percent to a record $31.8 million.

A partnership with Google, which provides Ask Jeeves with sponsored links, accounted for 66 percent of sales. Ask Jeeves said its queries grew 38 percent thanks to its new smart search features and a recent marketing campaign.

Ask Jeeves ranks No. 4 in customer satisfaction behind Google, Yahoo and MSN, beating out Internet giant AOL, according to the American Customer Satisfaction Index (ACSI), compiled by the University of Michigan Business School, the American Society for Quality, and consultancy CFI Group.

One of the first notable online entities with its now-downplayed butler character, the company struggled for survival after the dot-com crash, but appears to have turned the corner. For the year 2003, Ask Jeeves posted profit of $26 million, or $0.48 cents a share, reversing a 2002 loss of $21.3 million, or $0.52 cents a share. Revenue rose 65 percent to $107.3 million.

aQuantive Profits Up, But Guidance Less Than Expected

Interactive marketing company aQuantive reported strong fourth-quarter results Thursday, with profit rising 135.5 percent compared to the fourth quarter of the preceding year, to $4.1 million, or $0.07 cents a share, in line with analysts’ expectations.

Revenue grew to $63.9 million, a 44 increase over the same period a year ago. The company attributed this to clients spending more on Internet advertising, new client wins and considerable growth in Atlas DMT, the company’s technology side. aQuantive, the parent of interactive ad shops Avenue A and i-Frontier, as well as Atlas DMT, said gross profit jumped 31 percent compared to last years’ fourth quarter, to $17.3 million.

Other highlights for the quarter included the acquisition of Go Toast in December. The deal added an important component to Atlas DMT’s product suite, as paid search grows more important to digital marketers.

However, the company had forecast net income of 28 to 33 cents per share for this year, and Wall Street had expected 36 cents. The company said the Chicago office opening and the acquisition of Go Toast were not taken into account when analysts were formulating their expectations and hence the company’s yearly profit estimate seemed low.

Digitas Hits One-Year Profitability

Internet marketing consultancy Digitas reported strong fourth-quarter results and its first full year of profitability as a public company in 2003.

Digitas reported net income of slightly more than $8 million for the fourth quarter, or $0.11 per share, compared to a net income of $1.7 million, or $0.03 cents per share, in the same quarter of the previous year.

The company, which was founded 23 years ago, has weathered the dot-com crash, unlike many such agencies that bit the dust in 2000 and 2001, and now appears poised to continue its success.

Digitas reported 2003 net income of just under $17 million, or $0.24 per share, compared to a 2002 net loss of more than $40 million, or $0.65 per share.

The company had a 4 percent revenue increase to $53.4 million in the fourth quarter of 2003, from $51.4 million during the same period in the previous year.

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