*24/7 Media Issues Q4 Profit Warning, Cuts 100 More Jobs
And as if that were not enough bad news for the beleaguered ad-targeting network, chief financial officer Andy Johns announced his resignation, effective immediately.
In a conference call with analysts and the media, Johns said he was not leaving because of 24/7 Media's financial problems, but to spend more time with his family.
And on top of that, some analysts think 24/7 Media is ripe for a takeover.
The company said in its conference call that for the fourth quarter ended Dec. 31, it expects total revenues to be in the range of $43 million to $45 million, down from the $49 million in revenues it forecast previously. Earnings per share for the quarter were lowered to a loss of between 46 cents and 49 cents, from the previously expected 39 cents to 44 cents loss.
The company said that its poor performance was because of lower advertising spending during the holidays, a time when revenues generally rise.
"Our short-term outlook for the online advertising market looks cloudy," said David Moore, CEO of 24/7 Media.
He said that by cutting 100 additional employees, the company will realize about $12 million in savings in the fourth quarter and about $30 million for the year. 24/7 Media laid off 200 employees during the third quarter.
In an optimistic note, the company forecast that its revenues in 2001 would only decline between 10 percent and 15 percent.
However, analysts disagree.
Henry Blodget, Merrill Lynch's Internet analyst, said in a recent research report that he expects the company's revenues to decline by 35 percent in 2001.
"Clearly, the industry remains weak, particularly in both the banner and e-mail business," said Blodget. "For '01 we are looking for a 35 percent decline in network revenues for 24/7."
The analyst also said that 24/7 Media is in such a weakened state financially, and its stock is so depressed, that it is ripe for either a breakup or a takeover. He mentioned the recent acquisition of NetCreations by SEAT Pagine Gialle SpA, Turin, Italy, for $111 million.
"This bodes well for a breakup or takeover, which is still a possibility," Blodget said. "With the stock at 70 cents, the entire company is valued at about $30 million."
24/7 Media's stock closed Dec. 28 at 69 cents per share.