Engage Reports Strong Growth in Fiscal 2000 First Quarter.ANDOVER Andover (ăn`dōvər), town (1990 pop. 29,151), Essex co., NE Mass.; inc. 1646. Chiefly a textile producer in the 19th cent., Andover now makes toiletries, electronic and computer equipment, chemicals, medical instruments, rubber products, , Mass.--(BUSINESS WIRE)--Dec. 8, 1999-- Engage Knowledge customers showing demonstrable de·mon·stra·ble adj. 1. Capable of being demonstrated or proved: demonstrable truths. 2. Obvious or apparent: demonstrable lies. results Study results find profile based targeting beats content based targeting by nearly 50% Engage Technologies, Inc. (Nasdaq: ENGA), a provider of profile driven Internet marketing See Internet advertising. solutions and services and a majority-owned operating company operating company A business that engages in transactions with outsiders. of CMGI CMGI Commonly Maintained Grounds Infrastructures CMGI College Marketing Group Information (Services) , Inc. (Nasdaq: CMGI), today announced operating and financial results for its fiscal first quarter ended October 31, 1999. Total revenues for the fiscal 2000 first quarter were $8.3 million, a 423% increase from last year's first quarter and an 18% sequential increase over the fiscal 1999 fourth quarter revenues of $7.0 million. Net loss for the first quarter decreased to $10.5 million, or $0.22 per share, compared to a net loss of $10.8 million, or $0.26 per share, in last year's fourth quarter. Engage continued to make significant progress in obtaining new customers and enhancing the breadth and depth of the Engage Knowledge database, which became commercially available late in July. Some key achievements for the quarter include: - The addition of 35 new customers, including AltaVista, Insight Express/NFO Worldwide (NYSE NYSE See: New York Stock Exchange : NFO NFO Info File (file type extension) NFO New Fund Offer NFO National Farmers Organization NFO Naval Flight Officer (US Navy) NFO National Family Opinion ), FasTV, and CyBuy, bringing the total customer base to 370. The Company also increased its international customer base to 52, up from 43 in the previous quarter. - The increase of Engage Knowledge customers to 53, up from 34 in the fiscal 1999 fourth quarter. Of the Engage Knowledge customers, 19 had installed the necessary software and were actively contributing data, representing approximately 900 contributing sites, up from 408 last quarter. - The number of anonymous online behavioral behavioral pertaining to behavior. behavioral disorders see vice. behavioral seizure see psychomotor seizure. based profiles in the Engage Knowledge database increased to 42 million, up from 35 million at fiscal 1999 year end. - The October launch of Engage AudienceNet, the first Web- wide profile driven advertising and marketing network that uses anonymous, behavior based profiles to deliver substantial benefits to media buyers, Web sites and ad networks alike. By the end of October, Engage had run 28 campaigns. - The number of participating Web sites for Engage AudienceNet was approximately 400. This number is anticipated to grow with the addition of such customers as Flycast, to over 2,000 sites. Paul Schaut, President and Chief Executive Officer, commented, "Profile driven marketing is quickly emerging as a preferred solution for online marketers, as evidenced by Engage's rapid market expansion. During the quarter, we experienced strong customer growth and continued to enhance the quality of the Engage Knowledge database. In addition, we continued to execute on our business strategy through the signing of a definitive agreement to acquire AdKnowledge, the signing of strategic partnerships with leaders like IONA Technologies IONA Technologies, NASDAQ: IONA, began life as a campus company in Trinity College, Dublin and was founded by Chris Horn, Annrai O'Toole, Colin Newman and Seán Baker.[1][2] IONA maintains headquarter offices in Dublin, Boston and Tokyo. (Nasdaq: IONA), Atex Media Solutions, and BPA BPA British Paediatric Association. Interactive, and the addition of major new customers. Equally important are the introductions of new services, such as Engage AudienceNet, and in the first part of the second quarter, I/PRO's Velocity. We intend to continue taking initiatives that position the Company for accelerated growth and further increase the utilization and effectiveness of Engage's profile driven Internet marketing solutions." AdKnowledge on Track In September, Engage announced a definitive agreement to acquire AdKnowledge Inc., a leading provider of Web marketing management services focused entirely on the needs of online marketers and agencies. AdKnowledge will provide Engage with a leading presence on the "buy-side" of the market and the ability to build upon AdKnowledge's strong relationships with large, influential advertisers and agencies. Mr. Schaut commented, "We believe that the combination of Engage's profiling solutions with AdKnowledge's technology and services will help improve the overall results of online marketing campaigns for publishers, e-merchants and agencies. We look forward to capitalizing on the synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. of the two companies and creating added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
The Company finalized See finalization. the first step of its AdKnowledge acquisition, and has exercised management control of AdKnowledge since November 30 when CMGI acquired control of AdKnowledge through the issuance of CMGI common stock. The second step of the acquisition is expected to close on schedule later this month with a contribution of AdKnowledge shares held by CMGI and certain AdKnowledge shareholders to Engage in exchange for Engage common stock. Upon completion of the transaction, AdKnowledge will be a wholly-owned subsidiary of Engage. The transaction, which will be accounted for as a purchase, is subject to certain conditions including that Engage's stockholders approve the issuance of shares of Engage's common stock to CMGI. IPSOS-ASI Profiling Study Engage also continued to conduct a customer research study in conjunction with IPSOS - ASI ASI, n See Anxiety Sensitivity Index. , a leading international research group, which compared the effectiveness of profile based advertising to area content-based advertising. To date, the cumulative results from these tests indicate that by using Engage profiles to target advertising on a run-of-site buy, click through rates Click Through Rates The percent of individuals viewing a Web page who click on a specific banner ad appearing on the page. Notes: Overall click-through rates have declined substantially since the early days of electronic commerce on the Web. are directionally better than a targeted-content buy. For example, the study indicates that profile based advertisements achieve a 47.6% greater click through rate than those advertisements targeted by content. Results From AudienceNet "We are beginning to see the results from active campaigns run through our paying customers, both CMGI affiliated and non CMGI related, and they are even better than the IPSOS - ASI study," said Paul Schaut. "In fact, in a profile-based AudienceNet campaign run for Cybuy, an innovative online service to retailers, the response rates were over 100% higher than the response rates of similar campaigns, using the same creative, offer and time frame, shown on run of network inventory. Other results from different campaigns are also impressive." Mr. Schaut concluded, "Engage has been rapidly executing on our profile-centric strategy. Our strategic actions have positioned the Company as a leader and first-mover in anonymous profile driven online marketing and we expect to continue expanding our presence in the market both in the U.S. and internationally. Furthermore, Engage's competitive position is strengthened through CMGI's support and the potential synergies within the CMGI family. Looking ahead, we intend to continue to leverage these relationships in order to take full advantage of the emerging growth opportunities." About Engage: Engage Technologies, Inc., (Nasdaq: ENGA) a majority-owned operating company of CMGI, Inc., (Nasdaq: CMGI), is a leading provider of profile driven Internet marketing solutions. Engage offers a range of software products, data, and services that enable Web publishers, advertisers and merchants to target and deliver advertisements, commerce and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. offerings to their audiences and to measure their effectiveness. On September 23, 1999, Engage entered into a definitive agreement to acquire AdKnowledge Inc., a leading provider of complete Web marketing management services focused entirely on the needs of online marketers and agencies. Upon completion of the acquisition, AdKnowledge will operate as a wholly-owned subsidiary of Engage. Engage's core product and services include; Engage AudienceNet, the first Web-wide profile driven advertising and marketing network, Engage Knowledge, a global database that currently contains more than 42 million anonymous consumer profiles, and Accipiter AdManager, an online advertising management system that automates the scheduling, targeting and delivery of ads on Web sites and the reporting of campaign results. Engage offers Web traffic verification, measurement and analysis, and research through its wholly- owned subsidiary, I/PRO. Additionally, Engage is partnering with various resellers and system integrators See systems integrator. who will integrate Engage's local profile software, ProfileServer and DecisionSupportServer, to E-Commerce merchants across the U.S. For more information about Engage, please visit www.engage.com. About CMGI: With more than 50 companies, CMGI, Inc. (Nasdaq: CMGI) represents the largest, most diverse network of Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the companies in the world. This network includes both CMGI operating companies and a growing number of 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 through its venture capital affiliate, @Ventures. CMGI leverages the technologies, content, and market reach of its extended family of companies to foster rapid growth and industry leadership across its network, and the larger 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 and Sumitomo hold minority positions in CMGI. CMGI's majority-owned operating companies include Engage Technologies (Nasdaq: ENGA), NaviSite (Nasdaq: NAVI NAVI Nuclear Arms Verification Instrument NAVI New Analog Video Interface ), 1ClickBrands, 1stUp.com, Activate (1) See trigger. (2) To interact with an activation server at the time copy-protected software is installed. The install program generates a code that is sent to the activation server, which responds with an authorization code that allows the software to operate. .net, Activerse, Adsmart, AltaVista, iCAST, Magnitude Network, MyWay.com, NaviNet, SalesLink, Tribal Voice
n. pl. an·ces·tries 1. Ancestral descent or lineage. 2. Ancestors considered as a group. [Middle English auncestrie, alteration (influenced by .com, Asimba.com, AuctionWatch.com, Aureate au·re·ate adj. 1. Of a golden color; gilded. 2. Inflated and pompous in style. [Middle English aureat, from Late Latin aure Media, blaxxun, BizBuyer.com, Boatscape.com, buyingedge.com, CarParts.com, CraftShop.com, eCircles.com, EXP.com, FindLaw, Furniture.com, HotLinks, INPHO/HomePriceCheck.com, Intelligent/Digital, KOZ.com, Mondera.com, MotherNature.com, NextMonet.com, NextPlanetOver.com, OneCore.com, ONElist, PlanetOutdoors.com, Productopia, Raging rag·ing adj. 1. Very active and unpredicatable; volatile: a raging debate; a raging fire. 2. Remarkable; extraordinary: a raging hit on prime-time TV. Bull, Speech Machines, ThingWorld.com, Vicinity, Virtual Ink, Visto, Vstore and WebCT. CMGI Corporate headquarters is located at 100 Brickstone Square, Andover, MA 01810. Telephone: 978-684-3600. Fax: 978-684-3814. Additional information is available on the company's Web site at http://www.cmgi.com. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and . This press release includes forward-looking information. All statements other than statements of historical fact, including without limitation, those with respect to the Company's objectives, plans and strategies set forth herein and those preceded by or that include the words "believes," "intends," "expects," "will," "anticipates," or similar expressions, are 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. . These forward- looking statements are subject to a number of risks and uncertainties which could cause the Company's future results of operations to differ materially from those anticipated, and other risks detailed in the Company's 1999 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. and from time to time in the Company's other reports filed with the SEC. -0-
Engage Technologies, Inc.
Consolidated Operating Results
(In thousands, except per share data)
(unaudited)
Three months ended
July 31, October 31,
1999 1999
Revenue:
Product revenue $ 6,373 $ 6,816
Services and support revenue 653 1,486
Total revenue 7,026 8,302
Cost of revenue:
Cost of product revenue 2,453 3,188
Cost of services and support revenue 1,372 1,162
Total cost of revenue 3,825 4,350
Gross profit 3,201 3,952
Operating expenses:
Research and development 2,883 3,293
Selling and marketing 6,162 8,031
General and administrative 1,706 1,815
Amortization of goodwill and other
intangibles 2,286 2,283
Stock compensation 798 102
Total operating expenses 13,835 15,524
Loss from operations (10,634) (11,572)
Equity in loss of joint venture (306) (326)
Interest income 107 1,352
Net loss $ (10,833) $ (10,546)
Basic and diluted net loss per share $ (0.22)
Weighted average number of basic and
diluted shares outstanding $ 48,690
Pro forma basic and diluted net loss
per share(a) $ (0.26)
Pro forma weighted average number of basic
and diluted shares outstanding(a) $ 41,036
(a) Historical basic and diluted net loss per share has not been
presented for the three month period ending July, 31, 1999
because it is irrelevant due to the change in the Company's
capital structure upon the completion of the initial offering
which included the conversion of debt to CMGI and preferred
stock. The unaudited pro forma basic and diluted loss per share
information included in the accompanying statement of operations
reflects the impact of the conversion of debt to CMGI and
preferred stock as of the date of the issuance of the convertible
security or the beginning of each period, using the if-converted
method.
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