Earnings Roundup: ValueClick, iVillage

ValueClick Turns Q4 Profit

Cost-per-click ad network ValueClick reported a profitable third quarter on Thursday, saying it expected to continue returning profits in 2003.

The Westlake Village, Calif., company reported net income of $1.8 million, compared to a net loss of $2.7 million a year ago. Revenues grew 54 percent from a year ago to $18.8 million.

“We are pleased with our performance in both the fourth quarter and for the full year of 2002,” said James Zarley, ValueClick’s chairman and chief executive. “We are encouraged by what we’re seeing so far this year, and are even more optimistic about the prospects for ValueClick beyond 2003.”

In the first quarter, ValueClick expects to break even or turn a modest profit on $17.5 million of revenues, in what the company described as a seasonally slow period. For the year, it forecast 6 cents per share in net income and about $80 million in revenues.

ValueClick’s profits come after revamping its business through two acquisitions. Last March, the company inked a $128 million deal for affiliate network provider Be Free. In 2000, the company acquired a logfile analysis firm, a co-registration play, and another performance-based ad network. In 2001, ValueClick acquired MediaPlex, a provider of online ad serving technology and agency software.

In November, ValueClick paid $26.3 million to buy back the shares owned by DoubleClick, which had been the company’s largest shareholder.

iVillage Plans Cutbacks, Looks to Subscriptions

Women-focused Internet company iVillage reported a narrowed net loss in the fourth quarter, but revenues continued to decline, prompting executives to call for up to $10 million in cutbacks over 2003.

The company lost $7.5 million for the quarter, down from $9.8 million a year ago. Revenues, however, declined 23 percent from a year ago to $13.7 million. The company said it added 44 advertisers in the fourth quarter, but hoped to sell more subscription products to improve its results in 2003, but it did not give a forecast.

The company’s pinning its hopes for EBIDTA profitability on major cutbacks and subscription offerings. It plans to save money by restructuring real estate commitments, reducing service costs, and eliminating part of its workforce. Meanwhile, it’s diving into subscriptions in certain key areas.

“The market for subscription offerings is growing at a rapid pace with the number of U.S. consumers paying for online content doubling from 2001 to 2002,” said Doug McCormick, chief executive of iVillage. “iVillage is poised to increase its market share by offering relevant content and services that will provide our visitors with valuable offerings and add to our bottom line.”

iVillage has undertaken initiatives in a number of areas to increase its revenues. The site has offered subscriptions for a skin-assessment program, a sexual self-improvement course, and an online personality test. It inked a deal with Rutledge Hill Press for a line of books, rolled out a co-branded Internet service, and began selling a line of vitamins. In addition, the company has tapped into paid search through an arrangement with About.com’s Sprinks.

iVillage ended the quarter with just under $30 million in cash, cash equivalents and short-term investments.

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