Excite tops estimates, cuts loss
The search engine company narrowed its net loss of $5.7 million, or 37 cents per share, compared with a loss of $9.4 million, or 78 cents a share, a year ago.
The company narrowed its net loss of $5.7 million, or 37 cents per share, compared with a loss of $9.4 million, or 78 cents a share, a year ago. Analysts expected a loss of 49 cents per share, according to First Call.
Third quarter results include a $2.2 million charge for WebCrawler assets acquired from AOL. Excluding this charge, the loss for the quarter would have been $3.5 million, or 23 cents per share. Excite reported revenues of $14.4 million, up from $4 million a year earlier.
Meanwhile, the company lost one of its more high-profile board members as Steve Case, chairman and chief executive of American Online, resigned.
Separately, Excite today said Intuit, which acquired a 19 percent ownership interest in Excite in June, has formalized its observer-status to Excite's board. William Campbell, president and chief executive of Intuit, will represent Intuit as an observer to the Excite board.
The company further reported today that it had signed a letter of intent to acquire Netbot (See related story) for $35 million in stock.
The acquisition, which aims to enhance the Excite shopping experience, comes on the heals of several multiyear commerce contracts that will generate about $80 million in advertising and shared revenue.
Abhishek Gami, an analyst with Nesbitt Burns, estimates that Excite has already lined up about $4 million in quarterly revenue through these deals, extending at least through the third quarter of next year. Burns predicts over $6 million in e-commerce contractual revenue per quarter for fourth quarter 1998 to the third quarter of 1999.
In light of the guaranteed revenue, Gami raised his rating on the company last week to "strong buy"; increased his revenue estimate for 1997 to $44 million, from $41.9 million; and upped the fiscal year 1998 estimate to $83.8 million, from $79.2 million.
However, Excite won't be able to chalk up all of the revenue toward profits. Offsetting some of the new revenue will be payments that Excite will make to Intuit (INTU) through an existing seven-year agreement, in which a portion of the revenue generated by Excite's business and investing channel plus a share of the revenue generated in other finance areas goes to Intuit.
Yesterday the companies unveiled the first glimpse of their long-term partnership--a new business and investing channel on Excite. The site, dubbed "Excite Business & Investing by Quicken.com," replaces the current business and investing channel and is billed as offering a variety of financial information for every level of personal finance.
In June, Intuit, which produces the popular financial program Quicken, forked over $40 million for a 19 percent stake in Excite. At the time the two also inked a seven-year partnership.
Reporter Stephanie Miles contributed to this report.