FTD: Online Search Misstep Cost Sales

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A decision not to pursue search engine optimization at FTD Group Inc. cost the multichannel floral marketer sales during the second quarter of fiscal year 2006, the Downers Grove, IL-based company said yesterday.


"The consumer business's order growth for the 2005 Christmas season was below expectations [because of] our decision not to pursue high-cost order volume associated with online search," FTD president/CEO Michael J. Soenen said in a statement. "In anticipation of continued competitiveness in the online search environment and to better manage the consumer segment business going forward, we have made management changes within this segment including the replacement of our head of marketing."


FTD's consolidated revenue for the second quarter ended Dec. 31 totaled $109.2 million, a 1 percent gain over the previous year. Net income for the period totaled $5.9 million, or 19 cents per diluted share, compared to net income of $800,000 last year.


The consumer segment's revenue totaled $63.3 million in the quarter, a 1.8 percent gain over last year. Consumer orders totaled 1.1 million, up from 1 million a year ago. Average order value fell to $59.33 from $60.31 a year ago.


The percentage of Internet orders climbed to 89.3 percent from 85 percent a year ago. Specialty gift orders, which include all orders delivered via common carrier, comprised 37 percent of total orders compared with 30.4 percent last year.


Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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