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Digital Impact posts loss

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San Mateo, Calif.--E-mail marketing company Digital Impact blamed spam, in part, for the quarterly loss it posted Thursday.

The company had a net loss of $884,000, or 3 cents per share, in the fiscal first quarter, compared with a net loss of $293,000, or 1 cent per share, in the year-earlier quarter.

Digital Impact reported revenue of $10.4 million, down 5% from last year's fiscal first quarter. It said its search marketing services will help it reverse the downward trend.

“The declines in revenue and gross margin were the result of year-over-year price reductions combined with the effect of spam on our acquisition services business," said CFO David Oppenheimer in a statement. "However, with paid search now the No. 1 form of online customer acquisition, we expect to grow our revenues in this area through the recent acquisition of Marketleap."

--Carol Krol

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