CMGI Announces Record Fourth Quarter Revenues of $377.2 Million; Revenues Grow 568% over Prior Year Fourth Quarter, 62% over Preceding Quarter.Business/Technology Editors ANDOVER, Mass.--(BUSINESS WIRE)--Sept. 21, 2000 Company Expects Profitability in 5 of 6 Business Segments by Close of Fiscal Year 2001 CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CMGI), a leading global Internet operating and development company, today reported net revenues of $377.2 million for the fourth quarter ended July 31, 2000, a 62% sequential increase in quarterly revenues and a 568% increase compared with last year's fourth quarter. Net revenues for the Company's search and portals segment increased 6,208% compared with the fourth quarter of fiscal 1999, and increased 14% compared with the third quarter of fiscal 2000. Net revenues for the Company's infrastructure and enabling technologies segment increased 938% compared with the fourth quarter of fiscal 1999, and increased 33% compared with the third quarter of fiscal 2000. Net revenues for the Company's Internet professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. segment increased 24,096% compared with the fourth quarter of fiscal 1999, and increased 218% compared with the third quarter of fiscal 2000. Net revenues for the Company's e-business and fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. segment increased 275% compared with the fourth quarter of fiscal 1999, and increased 206% compared with the third quarter of fiscal 2000. Net revenues for the Company's interactive marketing segment increased 457% compared with the fourth quarter of fiscal 1999, and increased 14% compared with the third quarter of fiscal 2000. For the fiscal year ended July 31, 2000, CMGI's net revenues increased $711.7 million, or 382% to $898.1 million from $186.4 million in fiscal 1999. Excluding the effects of in-process research and development charges and amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and stock-based compensation charges in both periods, CMGI's net loss was $142.8 million or ($0.49) basic loss per share for the fourth quarter of fiscal 2000, compared to net income of $36.6 million or $0.13 basic income per share for the previous quarter ended April 30, 2000. Including the effects of in-process research and development charges and amortization of intangible assets and stock-based compensation charges in both periods, CMGI's net loss was $633.7 million or ($2.17) basic loss per share for the quarter, compared to a net loss of $428 million or ($1.53) basic loss per share for the previous quarter ended April 30, 2000. Fourth quarter fiscal 2000 results included the impact of pre-tax gains, classified as "other gains, net," of $82.1 million on the sale of Yahoo! common stock, $53.6 million on the acquisition of Half.com by eBay, and $9.2 million primarily resulting from issuance of stock by Engage to Compaq Computer Corporation (company) Compaq Computer Corporation - The largest US manufacturer and vendor of IBM PC compatible personal computers and servers. Compaq was started in 1982 by three ex-Texas Instruments employees. Quarterly sales $2499M, profits $210M (Aug 1994). http://compaq.com/. (NYSE NYSE See: New York Stock Exchange : CPQ CPQ Compaq CPQ Conseil du Patronat du Québec (Canada) CPQ Configure-Price-Quote CPQ Conseil de Presse du Québec (Québec Press Council, Canada) CPQ Companion Parrot Quarterly ). During the fourth quarter of fiscal 2000 the Company also recorded in-process research and development charges totaling $19.7 million primarily related to the acquisition of yesmail.com, and a $35 million write down accounted for as a realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. on one marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has investment. Third quarter fiscal 2000 results included pre-tax gains of $209.3 million on the sale of Yahoo! common stock and $4.2 million on the sale of Amazon.com common stock classified as "other gains, net," and a pre-tax gain of $20.9 million primarily resulting from issuance of stock by Vicinity in its initial public offering. During the third quarter the Company also recorded in-process research and development charges totaling $41.2 million related to the acquisitions of AdForce, Equilibrium and Flycast. Excluding the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, CMGI's fourth quarter fiscal 2000 operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were $606.2 million, reflecting a 42% increase from the third quarter of fiscal 2000 and a 517% increase from last year's fourth quarter. "The dramatic growth exhibited across the CMGI network in the past quarter and throughout the past year is a powerful testament to the strength and increasing reach of our companies," said David Wetherell, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , CMGI. "Through the evolution and expansion of our unique business model, we will continue to aggressively capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the synergies and efficiencies inherent in our new operating structure, while leveraging the emerging opportunities represented within our CMGI @Ventures portfolio. Looking forward to fiscal 2001, we will remain focused on strong growth, the clear achievement of leadership within our operating segments, and an accelerated path to profitability. In fact, we expect four out of five operating segments to begin to realize positive earnings before interest, taxes, depreciation, amortization, and in-process research and development charges, on a monthly run-rate basis by the end of the current fiscal year." During the company's fourth fiscal quarter of 2000, Compaq and CMGI announced the creation of a new joint venture company that will provide Internet-based products, services and information for a range of vertical employee groups. Named Freeup LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , the company expects to launch a business-to-employee (B2E B2E Business to Employee B2E Business to Enterprise ) web destination called Freeup.com(TM) later this year. Freeup.com will aggregate information and tools into task-specific subject areas designed to help employees simplify work processes and increase productivity. Initial funding from the parent companies is expected to total approximately $20 million. Compaq, through a wholly-owned subsidiary, owns a controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail in Freeup, while CMGI holds the remaining stake. Subsequent to the quarter end, recognizing the value of Tribal Voice's instant messaging Exchanging text messages in real time between two or more people logged into a particular instant messaging (IM) service. Instant messaging is more interactive than e-mail because messages are sent immediately, whereas e-mail messages can be queued up in a mail server for seconds or (IM) technology, and in keeping with CMGI's efforts to accelerate its path to profitability and effect strategic and operational efficiencies within its majority-owned companies, CMGion announced its intention to acquire Tribal Voice
OPERATING RESULTS AND HIGHLIGHTS On September 7, 2000, the company announced that it has formally organized its 17 majority-owned operating companies operating company A business that engages in transactions with outsiders. and venture capital affiliate into six lines of business. These six lines of business include five operating segments - search and portals; infrastructure and enabling technologies; Internet professional services; e-business and fulfillment; and interactive marketing - as well as CMGI's affiliated venture capital arm, CMGI @Ventures. In keeping with the new company alignment, CMGI will hereafter In the future. The term hereafter is always used to indicate a future time—to the exclusion of both the past and present—in legal documents, statutes, and other similar papers. report its financial results and key segment operating metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. in accordance with the new operational structure. CMGI intends to expand upon and revise these operating metrics in keeping with the larger evolution and organization of its business moving forward. In accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , all significant intercompany transactions Intercompany transaction Transaction carried out between two units of the same corporation. have been eliminated in consolidation. Accordingly, segment results reported by CMGI exclude the effect of transactions between CMGI's subsidiaries. Search and Portals (AltaVista, iCAST and MyWay.com) The Search and Portals segment reported revenues of $97,961,000 in the fourth quarter of fiscal 2000, compared with $86,129,000 in the previous quarter ended April 30, 2000, an increase of 14%. Fourth quarter revenue increases primarily reflect increased revenues for AltaVista and iCAST, including increases in AltaVista's advertising and software sales volumes, and growth in its European operations, along with increased sales by iCAST's Signatures Network subsidiary. Excluding the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the search and portals segment was $85,564,000 in the quarter just ended versus a loss of $76,989,000 for the quarter ended April 30, 2000. Including the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the search and portals segment was $307,723,000 in the quarter just ended versus a loss of $327,842,000 for the quarter ended April 30, 2000. Segment operating metrics included a record of more than 62 million unique users and average daily page views of more than 84.8 million for the month of July. AltaVista Company is the second most popular referring search engine, passing Excite in the most recent survey by WebSideStory's StatMarket (http://www.statmarket.com), issued in July. The amount of Web traffic worldwide AltaVista refers or directs to other sites nearly doubled to 17 percent over the previous 15-month period. Only Yahoo! ranked higher in the survey. AltaVista attributes its rise in search market share to its successful international expansion and continued worldwide commitment to search excellence. In the same month, AltaVista launched AltaVista India, its eighth country-specific web index, at http://in.altavista.com. The new site offers Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f the largest index of Indian Web sites available, covering over 1.25 million unique Web pages. In addition, AltaVista restructured its agreement with DoubleClick, Inc. AltaVista has extended its use of DoubleClick's DART for Publishers ad serving solution through 2004. In addition, AltaVista will accelerate taking lead advertising sales responsibility for its worldwide network of Web sites in the United Kingdom, France, Germany, Italy, Sweden, and the Netherlands by January 1, 2001. The majority of advertising served on AltaVista will use DART through 2002. In 2003, at least half of AltaVista's advertisements will be served by DART. AltaVista will assume majority responsibility for ad serving thereafter. iCAST's fourth quarter was highlighted by significant growth in membership and a number of strategic partnerships and one acquisition. In June, iCAST was selected as the entertainment channel for all Compaq Presario Presario is a series of desktop computers and notebooks from Compaq. The Presario family of computers was launched for the consumer marketplace in September 1993. Although HP has since acquired Compaq, the Presario name was not discontinued due to its marketability. PCs. Through this relationship, Compaq will link the Presario's "Entertainment" Internet keyboard A computer keyboard that contains buttons for common Internet functions such as launching the Web browser and e-mail applications and controlling sound volume. button to iCAST.com, providing users "one touch" access to iCAST's wide array of entertainment multimedia content, tools and services. iCAST also formed a strategic alliance with AltaVista to provide content to its entertainment channel. In July, iCAST bolstered its movies channel with the acquisition of Shortbuzz, one of the leading Web sites for independent filmmakers seeking online and offline distribution. The deal includes an archive of more than 400 short films and a syndication deal with The FX Network, whereby it will feature iCAST Movies' top short films on its program, "The 'X' Show." In July, MyWay launched a wireless version of its portal services to enable users of mobile computing Using a computing device while in transit. Mobile computing implies wireless transmission, but wireless transmission does not necessarily imply mobile computing. Fixed wireless applications use satellites, radio systems and lasers to transmit between permanent objects such as buildings devices to personalize per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. their wireless web experience. MyWay's portal has also begun to carry broadband entertainment content in its Entertainment Channel for Bell South, supporting the rapid growth of DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary service in the Bell South service area. Infrastructure and Enabling Technologies (Activate, CMGion, Equilibrium, ExchangePath, NaviPath, NaviSite, Tribal Voice and 1stUp.com) The Infrastructure and Enabling Technologies segment reported revenues of $26,234,000 in the fourth quarter of fiscal 2000, compared with $19,760,000 in the previous quarter ended April 30, 2000, an increase of 33%. Fourth quarter revenue increases primarily reflect increased revenues for NaviSite, including the results of continued build-out of data center facilities and growth in NaviSite's customer base. Excluding the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the infrastructure and enabling technologies segment was $70,188,000 in the quarter just ended versus a loss of $52,570,000 for the quarter ended April 30, 2000. Including the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the infrastructure and enabling technologies segment was $108,692,000 in the quarter just ended versus a loss of $73,875,000 for the quarter ended April 30, 2000. Q4 operating metrics for the Infrastructure and Enabling Technologies segment included: -- Average annualized revenue per managed hosting customer (including CMGI subsidiaries and affiliates) of $227,000; -- Total data center "raised floor" space of 88,000 square feet; -- More than 15 million total streams; -- 44 terrabytes of data transferred; -- More than 6.7 million ISP subscribers; and -- More than 29.9 million recorded ISP usage hours in July. Activate gained notice during the fourth quarter for its continued strong growth: as it was identified as one of the top four streaming infrastructure providers by Decise, and Activate's Canadian subsidiary was labeled the market leader by Convergence Consulting Group. Activate's specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. digital media infrastructure was further enhanced by deployment of additional distribution capacity using Activate's proprietary "cell-based" network architecture. Activate also bolstered its senior management team through the appointment of Dennis Shepard as Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , and opened an additional regional office in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . NaviPath expanded its network coverage to more than 92% of the US major market online population and added coverage of more than 58% of the Canadian major market online population during the fourth quarter. Added to their supplemental third-party network coverage, NaviPath can now provide local Internet access See how to access the Internet. to more than 96% of the total online population in the US and Canada. During the fourth quarter, NaviPath reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. its company into strategic business units focused on distinct product and market segments, including access network services, managed backbone services, private-label customer relationship management, and billing/registration services. The company also added two major customers to its growing list of more than 50-plus ISPs, Juno Online and Global Crossing, launched Version 4.0 of GeoDial, the company's flagship Internet access service, and acquired the technology assets of Proxymate from Lucent Technologies, providing a key privacy management function to the NaviOne VISP VISP Virtual Internet Service Provider VISP Vitamin Intervention for Stroke Prevention Trial VISP Video Imagery Standards Profile VISP Visual Information Systems Program platform. In an important operational milestone, the company also relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. its headquarters to a new 52,000 square foot facility and opened a state-of-the-art Network Management Center through which it will continue to provide 24x7 service to its customers. Since the quarter end, NaviPath surpassed the 2 million active user mark, with continued 20% to 30% growth month-over-month. The company also launched Version 1.1 of NaviOne, its flagship VISP service and rolled-out its first "turnkey See turnkey system. " NaviOne customer. Additionally, NaviPath commenced its initial overseas expansion by launching IP Wide Area Network (WAN) services linking its domestic backbone to four CMGI facilities across Europe. During the fiscal fourth quarter, NaviSite added 79 new customers and 35 new systems integrator/Web developer partners; staff size also increased to 473 from 425 at the end of the previous quarter to support this continued growth. NaviSite continued its international expansion, building on a strategic relationship with Level 3 Communications
Level 3 Communications NASDAQ: LVLT is a communications and information services company headquartered in Broomfield, Colorado, USA. for data center facilities with several new initiatives, including a relationship with the Arrowpoint division of Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. to develop and deploy technology to enhance the management and scalability of applications across globally distributed data centers, and most recently with the announcement of plans for a strategic partnership with NTT NTT Nippon Telegraph and Telephone Corporation NTT New Technology Telescope NTT National Technology Transfer, Inc NTT Name That Tune (TV game show) NTT National Tree Trust NTT Number Theoretic Transform DATA to deliver managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality to the Japanese market. In addition, the company expanded its streaming business with support for Microsoft's Windows Media Technologies See Windows Media. 7 and Digital Broadcast Manager. NaviSite continued to expand its business-to-business (B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business ) offerings with an announced agreement with Idapta(TM), a leading provider of enterprise-level operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. and trading applications for business-to-business (B2B) e-commerce, for the integration of Idapta's emarket operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. , Commerce O/S(TM), and trading application, MarketExchange(TM), with NaviSite's managed hosting solutions. NaviSite also announced the appointment of Tricia Gilligan as Chief Operating Officer. During the fourth quarter, 1stUp.com continued to establish itself as a leading provider of private label Internet access solutions and innovative advertising technology. In aggregate, 1stUp-powered ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. services now rank as the largest ISP in Canada and among the Top 5 largest ISPs in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Internetnews.com During the fourth quarter, 1stUp.com successfully launched free Internet access offerings with Belo Media Corporation, Ameritrade, Fox's "The X-Files," Encyclopedia encyclopedia, compendium of knowledge, either general (attempting to cover all fields) or specialized (aiming to be comprehensive in a particular field). Encyclopedias and Other Reference Books Britannica and a number of additional brands, bringing its distribution partner total to more than 130. Just one year since launching its first access offering with AltaVista, the company has now reached 5 million registered subscribers, with 800,000 subscribers in Canada. 1stUp.com also launched its Premium Service, which enables distribution partners to offer consumers a less expensive alternative to traditional fee-based dial-up services An information service on demand. The term was popular when analog modems were the only way to connect to a remote system. See dial-up. , without requiring consumers to view rotating ro·tate v. ro·tat·ed, ro·tat·ing, ro·tates v.intr. 1. To turn around on an axis or center. 2. banner ads A graphic image used on Web sites to advertise a product or service. Banner ads come in numerous sizes, but are often rectangles 460 pixels wide by 60 pixels high. Also 460 x 55 and 392 x 72 sizes are commonly used. . Lastly, the company successfully launched its broadband trial program, with 1stUp.com broadband services See broadband and broadband service provider. expected to launch nationally this fall through distribution partners still to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. . Internet Professional Services (CMGI Solutions) The Internet Professional Services segment reported revenues of $30,487,000 in the fourth quarter of fiscal 2000, compared with $9,575,000 in the previous quarter ended April 30, 2000, an increase of 218%. Fourth quarter revenue increases primarily reflect increased revenues as a result of having a full quarter of revenues for Tallan, which was acquired on March 31, 2000. Excluding the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the Internet professional services segment was $1,463,000 in the quarter just ended versus a loss of $6,359,000 for the quarter ended April 30, 2000. Including the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the Internet professional services segment was $52,842,000 in the quarter just ended versus a loss of $23,731,000 for the quarter ended April 30, 2000. Fourth quarter operating metrics for the Internet professional services segment included 391 billable consultants, and annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenue per billable consultant of $311,000. CMGI Solutions continued its pattern of solid growth during the fourth quarter of fiscal year 2000 adding several leading companies, including eBay, Wave Systems, and Kinko's to its current client base. In addition, the company continued its strategic hiring program, adding more than 125 consultants to meet its continued, planned growth. Extending its reach into new domestic markets, the company also opened offices in Miami, Atlanta, Irvine, Chicago and White Plains during the fourth quarter. CMGI Solutions now maintains a total of 12 office locations throughout the U.S. e-Business and Fulfillment (SalesLink and uBid) The e-Business and Fulfillment segment reported revenues of $141,158,000 in the fourth quarter of fiscal 2000, compared with $46,197,000 in the previous quarter ended April 30, 2000, an increase of 206%. Fourth quarter revenue increases primarily reflect increased revenues as a result of the acquisition of uBid on April 28, 2000. Excluding the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the e-business and fulfillment segment was $5,198,000 in the quarter just ended versus operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $3,729,000 for the quarter ended April 30, 2000. Including the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the e-business and fulfillment segment was $41,859,000 in the quarter just ended versus operating income of $3,010,000 for the quarter ended April 30, 2000. July operating metrics for the segment included approximately 5.3 million unique users, and 306,000 items sold at auction. uBid.com continued to build upon its position as a leading Internet auction site. During the fourth quarter, unique daily visitors increased 438 percent, registered users increased 145 percent, and bids increased 644 percent, as compared with the quarter ended April 30, 2000. Peak daily sales jumped to more than 10,000 units per day, compared to 6,700 units in the third quarter of fiscal 2000. Leveraging the strength of the CMGI network, uBid secured strategic alliances with seven CMGI companies in the fourth quarter, including: Engage to deliver uBid.com's auctions services to more than 2,700 participating Flycast Valet web sites; AltaVista's Loyalty Points Program, enabling uBid to offer AltaVista loyalty points to customers who purchase products via uBid's co-branded auction channel on AltaVista; yesmail.com to integrate the company's service of targeted permission email into uBid's registration process; Snapfish.com to offer services such as free photo processing, via a co-branded website to bidders of photography-related products; 1stUp.com to launch "uBid Connection," a free Internet access service powered by 1stUp.com technology; OneCore to establish a referral-based marketing relationship and a co-branded revenue sharing revenue sharing Funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. relationship; and AdForce to provide uBid with ad serving technology and services. Additionally, uBid formed a strategic relationship with Kodak, enabling third-party vendors to post enhanced pictures of products featured for auction. SalesLink's operating highlights for the quarter included the roll-out of the Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. Direct Line Feed (DLF DLF Digital Library Federation DLF Digital Library Federation (Washington, DC) DLF Development Loan Fund DLF Distribution Loss Factor DLF Det Liberale Folkeparti (Norwegian political party) ) initiative, a unique supply chain management program using an advanced planning system See spreadsheet and financial planning system. to better manage vendor relations, forecasting and inventory; ramp-up of production capabilities in the Guadalajara, Mexico facility; and the expansion of additional warehouse space in support of increased volumes. Interactive Marketing (AdForce, Engage and yesmail.com) The Interactive Marketing segment reported revenues of $81,408,000 in the fourth quarter of fiscal 2000, compared with $71,483,000 in the previous quarter ended April 30, 2000, an increase of 14%. Fourth quarter revenue increases primarily reflect increased revenues as a result of having a full quarter of revenues for yesmail.com, which was acquired on March 10, 2000, and increased revenues for Engage and AdForce, including substantial growth in Engage's software and consulting revenues, partially offset by a decrease in Engage's advertising revenues. The strength in Engage software sales was due to continued expansion of Engage's customer base, and a strategic transaction with Compaq, an affiliate of CMGI, that contributed revenues of approximately $13 million in the current quarter. Excluding the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the interactive marketing segment was $42,321,000 in the quarter just ended versus a loss of $51,073,000 for the quarter ended April 30, 2000. Including the effects of in-process research and development and amortization of intangible assets and stock-based compensation charges, the operating loss for the interactive marketing segment was $243,090,000 in the quarter just ended versus a loss of $283,977,000 for the quarter ended April 30, 2000. Operating metrics for the Interactive Marketing segment during the quarter included: -- More than 79.3 billion ads served; -- 84 million unique, anonymous profiles in the Engage Knowledge database; -- 52.5 million emails served; and -- More than 11.6 million registered email members. During the quarter, Engage expanded its operations internationally with the acquisition of Virtual Billboard Network, now Engage Canada, and also took majority control of Engage Japan. Additionally, subsequent to the quarter, the company expanded its global media network through the acquisition of Space Asia Media Limited and, combined with Engage Australia, renamed it Engage Asia. The Company also finalized See finalization. its acquisition of MediaBridge Technologies, now Engage Software, which further expands Engage's product offerings to both traditional off-line and online marketers. Engage's international revenues accounted for 15% of its total revenues in the fourth quarter of fiscal 2000, up from nearly 7% in the fiscal third quarter. Engage now has offices in 13 foreign countries (14 total with U.S.) with over 8,700 customers in 40 countries. Subsequent to the end of the fourth quarter, Engage announced new strategic reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. agreements with YellowBrix, Angara, Solbright, and Compaq. The multi-million dollar Compaq agreement contributed significantly to software revenues in the fourth quarter and is a natural extension of Compaq's existing strategic relationship with Engage. AdForce's fourth fiscal quarter of 2000 was highlighted by strong customer growth and the continued expansion of AdForce's new media platform. AdForce enabled 413 new sites with its service in Q4, and signed several new key ad management agreements, including OneMediaPlace, Free Real Time.com, 1stUp.com and uBid.com. AdForce's growth was supported by near perfect system performance. In addition, AdForce continued to extend its advertising management and delivery services to new media platforms beyond the PC-based Internet as part of the "AdForce EveryWhere" program. AdForce continued to enhance its position in the wireless advertising delivery marketplace, adding OpenGrid and agentGO.com to its list of wireless content delivery partners. Other milestones included a relationship with Canada-based National Electronic Technologies to deliver digital advertising to Public Access Internet Kiosks; and a strategic relationship with Hypercom to enhance ad delivery capabilities to retail point-of-sale devices. To close the quarter, AdForce announced an entirely new phase of the AdForce EveryWhere program, extending digital advertising management and delivery services to interactive television. AdForce also announced strategic relationships with interactive television partners Liberate (Liberate Technologies, San Mateo, CA) A software company that specialized in the information appliance field. Formerly Network Computer, Inc. (NCI), a spin-off from Oracle in 1996, it changed its name in 1999. , WorldGate, ICTV ICTV International Committee on Taxonomy of Viruses ICTV Independent Community Television Alliance and Planetweb. During its first full quarter as a CMGI operating company, yesmail.com, a leading email marketing solutions provider and a pioneer of permission email marketing, leveraged relationships with several CMGI companies to expand its YesMail Network. In the fiscal fourth quarter, yesmail.com added 38 network partners, including CMGI-affiliated companies uBid.com, Hotlinks, eCircles.com and Visto. Additionally, yesmail.com announced a strategic alliance with Engage to rapidly build business-to-business opt-in email lists, an area of growing demand by marketers. Since joining the CMGI network in March 2000, yesmail.com's membership base has increased from 8.1 million to 11.6 million members. Additionally, the company is expanding at a rate of more than 1 million new members per month. Venture Capital (CMGI @Ventures) In addition to the Company's results from continuing operations for its five operating segments, during the fourth quarter of fiscal 2000, CMGI's affiliated venture capital arm, CMGI @Ventures, generated net pre-tax gains of $132,416,000. These gains primarily consisted of a pre-tax gain of $82,119,000 on the sale of Yahoo! common stock, which CMGI had previously acquired from the sale of GeoCities, a CMGI @Ventures investment, and a pre-tax gain of $53,641,000 on the acquisition of Half.com, a CMGI @Ventures investment, by eBay. During the fourth quarter of fiscal 2000, CMGI @Ventures invested new capital totaling $55.5 million. The return on CMGI @Ventures investments which had liquidity events during fiscal 2000 was 589%. Inception-to-date returns from liquidity events for CMGI @Ventures investments as of July 31, 2000, was 3,357%. CMGI contributes 100% of the capital and is entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to approximately 80% of net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. , as defined, of CMG CMG Coastal & Marine Geology (USGS) CMG Chipotle Mexican Grill, Inc. (stock symbol) CMG Companion (of the Order Of) St Michael and St George CMG Computer Measurement Group @Ventures I, CMG@Ventures II, CMGI@Ventures III and CMGI@Ventures IV. In addition, CMGI is entitled to approximately 2% of net realized gains, as defined, of @Ventures III and @Ventures Foreign Fund III. The capital for @Ventures III and @Ventures Foreign Fund III is provided primarily by outside parties. CMGI's capital commitment to @Ventures III and @Ventures Foreign Fund III is not significant. CMGI's portion of the net operating performances of CMGI @Ventures' investments in which its ownership is between 20% and 50%, or investments in which CMGI has the ability to exert significant influence on the investee company, is reflected in equity in losses of affiliates. Equity in losses of affiliates from CMGI @Ventures investments was $35,614,000 for the quarter ended July 31, 2000, compared with $10,055,000 for the quarter ended April 30, 2000. During the fourth quarter of fiscal 2000, equity in losses of affiliates from CMGI @Ventures' investments included CMGI's portion of the net operating performances of Answerlogic, BizBuyer.com, Boatscape, CarParts.com, Corrigo, Domania.com, eCircles.com, Ensera (formerly buyersedge.com), EXP.com, FindLaw, FoodBuy.com, GXMedia, Half.com, HotLinks, Idapta, IronMax, KnowledgeFirst, MyFamily.com, NameTree, NextMonet.com, NextOffice.com, Oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. .com, OneCore, PlanetOutdoors.com, Productopia, Radiate ra·di·ate v. 1. To spread out in all directions from a center. 2. To emit or be emitted as radiation. ra , ThingWorld.com, Vicinity, Virtual Ink and WebCT. CMGI @Ventures investments in Alibris, Asimba.com, AuctionWatch.com, Craftshop.com, Dialpad.com, DiamondBack Vision, Dejima, The EC Company, eGroups, Furniture.com, Gofish.com, Industria Solutions, KOZ.com, MobileLogic, Mondera.com, One Media Place, RealPulse, SnapFish, SpotLife, Tvisions, Ventro Corporation, Vcommerce Corp. (formerly Vstore.com) and Visto, are accounted for under the cost method of accounting. Under this method no portion of the earnings or losses of these companies is included in CMGI's consolidated results of operations at July 31, 2000. In the fiscal fourth quarter, CMGI @Ventures made initial venture investments in two new portfolio companies: Corrigo, the leader in mobile service management for the residential property management industry, and TheRealm, a business-to-business e-commerce hub for the commercial real estate industry. CMGI @Ventures also made follow-on investments in the following portfolio companies: Alibris, AuctionWatch.com, Ensera, EXP.com, Furniture.com, Hotlinks, KnowledgeFirst, Mondera.com, NextMonet.com, OneMediaPlace, PlanetOutdoors.com and Spotlife. Since the close of the fourth quarter, CMGI @Ventures announced a leading investment in 2Roam, a wireless Web Application Service Provider (ASP) that enables e-businesses to deliver content, commerce and services to all types of wireless devices. As announced on September 7, 2000, CMGI @Ventures is merging three of its domestic venture capital funds Venture Capital Funds An investment fund that manages money from investors seeking private equity stakes in small and medium-size enterprises with strong growth potential. Notes: -- CMGI @Ventures IV, CMGI @Ventures B2B and CMGI @Ventures Technology -- into a single evergreen evergreen, term commonly used as synonymous with conifer and applied also to all those broad-leaved plants that bear green leaves throughout the year. Of the latter, most are plants of the tropics, subtropics, and other areas where the growing season is prolonged (e. fund called CMGI @Ventures IV to better reflect its operation as an integrated firm. About CMGI and CMGI @Ventures CMGI, Inc. (Nasdaq: CMGI), a leading global Internet operating and development company, represents a network of 70 established and emerging companies, including both CMGI operating businesses and synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. investments made through its venture capital affiliate, CMGI @Ventures. Companies in the CMGI network span a range of vertical market segments including search and portals; infrastructure and enabling technologies; e-business and fulfillment; interactive marketing; and Internet professional services. CMGI leverages the technologies, content and market reach of its extended network to foster rapid growth and industry leadership across the Internet Economy The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price. . Compaq, Intel, Microsoft, Pacific Century CyberWorks and Sumitomo hold minority positions in CMGI. CMGI's majority-owned operating companies include Engage (Nasdaq: ENGA), NaviSite (Nasdaq: NAVI NAVI Nuclear Arms Verification Instrument NAVI New Analog Video Interface ), 1stUp.com, Activate, AdForce, AltaVista, CMGion, CMGI Solutions, Equilibrium, ExchangePath, iCAST, MyWay.com, NaviPath, SalesLink, uBid.com, and yesmail.com. CMGI @Ventures has ownership interests in 53 companies, including Lycos, Inc. (Nasdaq: LCOS (Liquid Crystal on Silicon) A technology used to make microdisplays for rear-projection TVs and head-mounted displays (HMDs). Each LCoS chip hosts a grayscale LCD shutter sandwiched between a cover glass and a mirror. ), Critical Path (Nasdaq: CPTH), MotherNature.com (Nasdaq: MTHR MTHR Mobile Telecommunications and Health Research (UK) ), Ventro (Nasdaq: VNTR VNTR Variable Number of Tandem Repeat(s) ) and Vicinity (Nasdaq: VCNT). CMGI's corporate headquarters is located at 100 Brickstone Square, Andover, MA 01810. CMGI @Ventures has offices there, as well as at 3000 Alpine Road, Menlo Park Menlo Park. 1 Residential city (1990 pop. 28,040), San Mateo co., W Calif.; inc. 1874. Electronic equipment and aerospace products are manufactured in the city. Menlo College and a Stanford Univ. research institute are there. 2 Uninc. , CA 94028. For additional information, see http://www.cmgi.com and http://www.ventures.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which address a variety of subjects including, for example, the expected growth and expansion of CMGI's business and operations, the expected operating results of CMGI's segments, and the expected benefits resulting from CMGI's revised structure and reporting procedures. All statements other than statements of historical fact, including without limitation, those with respect to CMGI's goals, plans and strategies set forth herein are forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: CMGI's success is dependent upon its ability to integrate its operating companies in accordance with its segment strategy; CMGI's success, including its ability to decrease its cash burn rate, improve its cash position and revenue run rate and reach profitability, depends on its ability to execute on its business strategy and the continued and increased demand for and market acceptance of CMGI's and its operating companies' web sites and the Internet in general; CMGI may experience difficulties integrating technologies, operations and personnel of recent acquisitions; and increased competition and technological changes in the markets in which CMGI competes. For a detailed discussion of cautionary statements that may affect CMGI's future results of operations and financial results, please refer to CMGI's filings with the Securities and Exchange Commission, including CMGI's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the most recently ended fiscal year and the latest Quarterly Report on Form 10-Q Form 10-Q See 10-Q. .
CMGI, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended Twelve months ended
July 31, April 30, July 31, July 31, July 31,
2000 2000 1999 2000 1999
--------- --------- --------- --------- ---------
Net revenues $377,248 $233,144 $56,464 $898,050 $186,389
Operating
expenses:
Cost of
revenues 308,566 188,318 54,749 737,264 179,553
Research and
development 52,691 49,671 6,743 153,974 22,253
In-process
research
and
development 19,746 41,220 1,561 65,683 6,061
Selling 161,291 128,912 19,095 475,441 45,505
General and
administrative 83,684 61,314 17,618 218,615 43,549
Amortization of
intangibles
and
stock-based
compensation 531,023 481,987 8,093 1,436,880 16,127
--------- --------- --------- --------- ---------
Total
operating
expenses 1,157,001 951,422 107,859 3,087,857 313,048
Operating
loss (779,753) (718,278) (51,395) (2,189,807) (126,659)
Other income
(deductions):
Gains on
issuance of
stock by
subsidiaries
and
affiliates 8,460 19,988 81,103 80,387 130,729
Other
gains, net 97,230 213,537 663,620 525,265 758,312
Minority
interest 54,427 55,980 1,852 165,271 2,331
Equity
in losses
of
affiliates (36,167) (10,290) (2,636) (51,886) (15,737)
Interest
income 10,571 14,430 2,481 41,521 4,640
Interest
expense (30,100) (12,987) (1,076) (56,617) (4,371)
--------- --------- --------- --------- ---------
Total 104,421 280,658 745,344 703,941 875,904
Income (loss)
from
continuing
operations
before income
taxes (675,332) (437,620) 693,949 (1,485,866) 749,245
Income tax
expense
(benefit) (41,665) (9,581) 294,421 (121,173) 325,402
--------- --------- --------- --------- ---------
Income
(loss)
from
continuing
operations (633,667) (428,039) 399,528 (1,364,693) 423,843
Discontinued
operations,
net of income
taxes:
Loss from
operations
of lists
and
database
services
segment -- -- -- -- (806)
Gain on
sale
of CMG
Direct
Corporation -- -- 53,203 -- 53,203
--------- --------- --------- --------- ---------
Net income
(loss) (633,667) (428,039) 452,731 (1,364,693) 476,240
Preferred
stock
accretion
and
amortization
of discount (1,890) (2,170) (978) (11,223) (1,662)
--------- --------- --------- --------- ---------
Net income
(loss)
available
to
common
stockholders $(635,557) $(430,209) $451,753 $(1,375,916) $474,578
========= ========= ========= ========= =========
Basic
earnings
(loss)
per share
available
to common
stockholders $(2.17) $(1.53) $2.37 $(5.26) $2.54
========= ========= ========= ========= =========
Dilutive
earnings
(loss) per
share
available to
common
stockholders $(2.17) $(1.53) $2.12 $(5.26) $2.30
========= ========= ========= ========= =========
Shares used in
computing
earnings
(loss)
per share:
Basic 293,532 281,936 190,788 261,555 186,532
========= ========= ========= ========= =========
Diluted 293,532 281,936 213,844 261,555 206,832
========= ========= ========= ========= =========
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