DoubleClick posts wider loss as expected

The online advertising company says its third-quarter loss widened, matching analysts' estimates, while revenue more than doubled as it gained more than 100 customers for its online marketing services.

NEW YORK--DoubleClick, the No. 1 online advertising company, said its third-quarter loss widened, matching analysts' estimates, while revenue more than doubled as it gained more than 100 customers for its online marketing services.

DoubleClick said its loss widened to $5.4 million, or 13 cents a share, from $4.7 million, or 14 cents, in the year-earlier period. It was expected to lose 14 cents a share, the average estimate of analysts polled by First Call. Still, that didn't meet some unpublished estimates that DoubleClick would lose 10 cents a share. The company's revenue more than doubled to $44.9 million from $20.8 million.

DoubleClick, which sells advertising space on more than 1,300 Web sites, is facing increased competition from CMGI. The Internet venture fund company recently bought three of DoubleClick's rivals to grab a larger share of one of the biggest sources of revenue on the Internet. DoubleClick also needs to decrease its dependence on AltaVista, the Web search service that's majority-owned by CMGI and which accounts for a large portion of DoubleClick's sales.

"The handwriting is on the wall," said Chris Charron, an analyst at Forrester Research, a Cambridge, Massachusetts-based technology research company. "It's fair to say that DoubleClick will slowly lose [the AltaVista] account."

DoubleClick released its earnings after markets closed.

Competitive threat
CMGI has said that it will honor AltaVista's three-year contract with DoubleClick. Still, CMGI has said that it now has the capability of moving about half the current business that DoubleClick is doing over the CMGI group of online advertising companies.

DoubleClick president Kevin Ryan said he doesn't believe CMGI will become a bigger competitive threat.

"With CMGI, nothing really changes strategically for us because we've been competing with these companies independently for sometime," Ryan said on the company's earnings conference call. "It's not a surprise to us that there would be consolidation."

DoubleClick agreed to buy NetGravity, another Internet advertising company, in June and said it would buy Abacus Direct in June. The company expects those acquisitions to close later this year.

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