GoTo Cuts First-Quarter Loss to $6.7M

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GoTo, which offers pay-for-performance search services through its Web site, said it cut its first-quarter loss to $6.7 million, or 13 cents per share, from $30.5 million -- or 67 cents per share -- a year earlier.


The company said revenue more than tripled in the first quarter to $52 million, from $17.2 million in the same quarter a year earlier.


In the first quarter, GoTo made 314 million paid introductions, up from 88 million in first quarter 2000. A paid introduction is when someone clicks on a paid link or banner on a GoTo affiliate site and is taken to an advertiser's site. Advertisers paid GoTo an average of 16 cents for each paid introduction in the first quarter, down from 17 cents in fourth quarter 2000 and 19 cents in first quarter 2000.


GoTo said that at the end of the first quarter, it had more than 42,000 active, paying advertisers in the United States, up from 25,000 a year ago. The average spend per advertiser in the first quarter was $1,277, the company said.


Jamie Kiggen, an analyst at Credit Suisse First Boston Corp., attributed GoTo's performance to its "low-risk, high-return" pay-for-performance business model. He said the company's U.S. search business reported a $1 million loss in the quarter, putting it on track to reach breakeven by the end of the year.


"Revenue upside was primarily driven by increased volume of paid clicks, which was up 38 percent quarter-over-quarter, from 228 million to 314 million," Kiggen said in a recent report about the company. "This growth counterbalanced the company's other key revenue driver, price per paid click, which, as expected, declined by a penny to 16 cents."


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