DoubleClick projects downturn in media revenue

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Leading online ad network and ad management company DoubleClick is projecting a 25 percent to 30 percent downturn in its media revenue for 2001, which it attributes primarily to the weakened advertising environment as well as to the company's significantly decreased reliance on revenue from one-time key AltaVista Co.

In an investors' call after close-of-market on Thursday, CEO Kevin Ryan said he expects a tough first half in the media division and predicts that media will account for only 20 percent of the company's total business going forward.

The company is forecasting its revenue will grow just 6 percent to 12 percent in 2001.

As a sign of the industry's slowdown, DoubleClick reported a fourth quarter net loss of $104.7 million on revenue of $132.3 million. Revenue was 2 percent below third-quarter revenue of $135 million, but a 41 percent increase over its fourth quarter 1999 revenue of $93.7 million. Full year 2000 revenue was $506 million, an increase of 96 percent over 1999. The company concluded the fourth quarter with $873 million in cash and securities.

For the first time, DoubleClick's TechSolutions unit exceeded its media revenue in the latest quarter. Tech revenue was up 114 percent to $61.5 million in the fourth quarter over the year earlier period.

Mr. Ryan contended that the decrease in online advertising is not a result of marketers transferring ad dollars to TV or radio advertising but is instead a reflection of an overall tightening of marketing budgets.

Following the introduction of new e-mail products in the last few months, DoubleClick will continue to ramp up its efforts in that category. It plans to use part of the $8.6 million breakup fee paid by NetCreations in the fourth quarter -- when DoubleClick decided not to match a counter cash offer to acquire the e-mail list manager -- by investing $5 million to build up its e-mail business over the first and second quarters.

Analyst Dana Serman at Lazard Freres & Co. had predicted DoubleClick would meet but not exceed its projections with revenue of $127 million and a loss per share of $.01, both revised down from the company's intra-quarter call in December. He said Yahoo!'s weakened forecast for 2001 suggests that DoubleClick, which shares many of the same advertising clients, will also face a difficult first quarter financially.

DoubleClick's stock slumped 9.6 percent to $11.25 Jan. 11, down 91 percent from its 52-week high.

-- Cara Beardi

Copyright January 2001, Crain Communications Inc.

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