GoTo Pares Net Loss in Second Quarter, Achieves Breakeven

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Pay-for-performance search portal GoTo yesterday reported second-quarter revenue of $62.5 million, up 200 percent from $21 million posted in the same period a year ago. The company whittled its second-quarter net loss to $2.9 million, or 6 cents per share, from $20.3 million -- or 42 cents per share -- a year earlier.


On an operating basis, GoTo achieved profitability in the second quarter, which ended June 30. The company said its U.S. search business, which represents a majority of its revenue, posted operating income of $1.3 million in the second quarter, compared with a loss of $2 million in the first quarter.


"We expect the search market to grow quickly over the next several years, and we believe the quality of our service, team and execution leaves us well-positioned to capitalize on the opportunities likely to emerge," Ted Meisel, GoTo's president/CEO, said in a statement.


GoTo, which operates the GoTo.com Web portal, said paid introductions in the second quarter were 323 million, up from 93 million a year ago. Advertisers paid the company an average of 19 cents per introduction, down slightly from 21 cents a year ago.


The company's pay-for-performance search engine allows advertisers to bid for placement on the GoTo.com Web site. Advertisers pay the company per click, or per introduction.


The company noted that its active paying advertiser roster rose to 45,000 in the second quarter, from 42,000 in the first quarter. The average spend per advertiser rose 10 percent to $1,405 in the quarter, from $1,277 in the first.


GoTo said the advertiser base of its GoTo United Kingdom subsidiary reached 2,600 active, paying advertisers in the second quarter. The company plans to launch services in Germany in the first half of 2002.


The firm said it expects third-quarter revenue to reach $64 million. Net income in the quarter is expected to grow to $1 million, or 2 cents per share. In the fourth quarter, GoTo expects to report revenue of $70 million, with net income of $3 million, or 5 cents per share.


For the full year 2002, GoTo forecasts revenue of $320 million, with net income of $19 million, or 31 cents per share.


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