Update: CMGI's Red Ink Hits $5.4B in Fiscal '01
As if that were not enough, the company's Engage Inc. unit reported a net loss of $330.9 million for the fourth and said its chief executive officer, Tony Nuzzo, announced his resignation in a conference call with analysts, saying only that he would "pursue other interests."
Analysts noted that CMGI continues to struggle in attempts to reinvent itself. It continues to rid itself of struggling companies, most recently selling Activate.net to Loudeye for $4 million, shutting down NaviPath and forcing Engage to sell its media business.
"CMGI's operations continue to be dominated by its e-business/fulfillment operation, which now represents 64 percent of revenue," said Steven Frankel, an analyst with Adams, Harkness & Hill. "It is hard for us to believe that CMGI today is dominated by SalesLink and uBid, the two units that comprise the e-business/fulfillment operation."
Net revenue for the fourth quarter was $255.5 million, down from $369.6 million in fiscal 2000. Full-year revenue was $1.2 billion, up from $890.4 million a year earlier.
The company's fourth quarter and full year ended July 31.
"We continue to aggressively restructure the operations of our core holdings and have taken several key steps to improve the prospects of these businesses," said David Wetherell, CMGI's chairman/CEO. "Our increased focus on realizing efficiencies through consolidation and improvement of operating processes should continue to bear fruit in coming quarters as we move closer to our goal of profitability."
CMGI, Andover, MA, said its interactive marketing division, which includes software developer Engage and e-mail messaging services provider yesmail.com, saw net revenue of $19.9 million, down from $72.5 million a year ago. In June, the division forecast fourth-quarter revenue of $22 million to $24 million. For the full year, the division posted net revenue of $133.4 million, down from $187.3 million in 2000.
CMGI said yesmail.com increased the number of e-mail addresses under management by 28 percent in the fourth quarter to more than 25 million. Yesmail.com, long known mainly as a business-to-consumer e-mail list manager and broker, is trying to reposition itself as a CRM/customer-retention services firm. Industry observers characterized the move as an attempt to compensate for the soft BTC e-mail market.
For Engage, the company's former ad-serving unit now involved in software development, its fiscal fourth-quarter net loss of $330.9 million, or $1.68 per share, compared with a net loss of $112.2 million a year ago.
Christopher Cuddy will serve as interim president/CEO until a permanent replacement is found for Nuzzo. Cuddy most recently was a vice president of corporate development at CMGI.
For its fiscal fourth quarter Engage reported revenue of just over $9 million, down from $27 million in the same quarter a year earlier. Operating expenses in the quarter rose to $140.8 million from $23.6 million in 2000. Engage's operating loss in the quarter rose to $138 million from $522,000 a year ago.
Engage noted that it went through $21.6 million during the quarter and ended its fiscal year with $33.3 million in cash. Cuddy said Engage has enough cash to reach profitability, but he would not speculate as to when that might happen.
Engage announced its exit from the online advertising market Sept. 13 and said it would refocus on its multichannel software products. It ceased serving ads Sept. 23. The company sold its AdKnowledge business to online marketing and technology firm Bluestreak for an undisclosed amount and said it would discontinue the rest of its media operations Sept. 28.
CMGI's AltaVista unit seems to be going the way of Engage, rejecting an advertising-supported model in favor of enterprise software. AltaVista, which accounts for 12 percent of CMGI's sales, showed a 20 percent decline in revenue in the quarter.