MessageMedia Fires 100, Says Revs Will Be Lower

The e-mail marketer said its technology business saw about 70 percent less income this quarter.

E-mail marketers are proving to be no more insulated against the hostile ad spending market than their banner-centric brethren — as MessageMedia indicated on Thursday, announcing that it will cut about 100 posts domestically to shave operating expenses.

In a statement Thursday, the Superior, Colo.-based company pointed to “softening industry conditions … which [have] resulted in lower demand for the company’s services and software, and by the capital markets, which has shifted the focus of its valuation metrics from the development of market share to operating profitability.”

In late November, email marketer NetCreations echoed similar comments about the state of the industry in trending down its fourth-quarter earnings predictions, from $0.00 to $0.02 per share, to -$0.04 to -$0.06.

MessageMedia said that it expects its fourth quarter revenues to come in between $7 million and $8 million, versus the $10.2 million it reported in third quarter. It also said it would see a net loss in the fourth quarter of between $11 million and $12 million, or $0.43 to $0.44 per share, before a restructuring charge of about $1.8 million.

MessageMedia said that while its email unit will produce flat revenue from third quarter, its technology business will actually see about 70 percent, or $800,000, less revenue. The company said in its statement that this downturn is due to a lower number of contracts and the adoption of “more conservative revenue recognition policies.”

As a result of the restructuring, the company said it expects to shave $3.5 million to $4 million in future quarterly operating costs. The company also said it would cut operating expenditures and reduce investments in wireless and online customer care products.

As a result, MessageMedia said it would be earnings-positive before interest, taxes, depreciation, and amortization in the third quarter of 2001, and fully earnings positive in the following quarter. Last quarter, the company said it expected to become profitable in “mid-2001.”

At the end of third quarter, the company said it had about $22.5 million in the bank, which should be able to carry the company to its new profitability dates, assuming that revenues don’t slide any further.

At press time, shares of MESG were down 28 percent to $1.03.

Subscribe to get your daily business insights

Whitepapers

US Mobile Streaming Behavior
Whitepaper | Mobile

US Mobile Streaming Behavior

5y

US Mobile Streaming Behavior

Streaming has become a staple of US media-viewing habits. Streaming video, however, still comes with a variety of pesky frustrations that viewers are ...

View resource
Winning the Data Game: Digital Analytics Tactics for Media Groups
Whitepaper | Analyzing Customer Data

Winning the Data Game: Digital Analytics Tactics for Media Groups

5y

Winning the Data Game: Digital Analytics Tactics f...

Data is the lifeblood of so many companies today. You need more of it, all of which at higher quality, and all the meanwhile being compliant with data...

View resource
Learning to win the talent war: how digital marketing can develop its people
Whitepaper | Digital Marketing

Learning to win the talent war: how digital marketing can develop its peopl...

2y

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. It provides expert insight on how companies can ret...

View resource
Engagement To Empowerment - Winning in Today's Experience Economy
Report | Digital Transformation

Engagement To Empowerment - Winning in Today's Experience Economy

1m

Engagement To Empowerment - Winning in Today's Exp...

Customers decide fast, influenced by only 2.5 touchpoints – globally! Make sure your brand shines in those critical moments. Read More...

View resource