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Go2Net tops 2Q expectations

Go2Net (Nasdaq: GNET) shot past consensus forecasts in the second quarter.

After market close Monday, the Web portal operator reported fiscal second quarter net income of $8.3 million, or 18 cents per share, not counting goodwill writedowns. First Call's survey of six analysts predicted a profit of 11 cents per share.

Including $19.8 million recorded for amortization of intangibles, Go2Net lost $11.5 million, or 38 cents per share.

Second quarter revenue of $18.7 million represented a 34 percent gain sequentially and 333 percent improvement year-over-year. Gross margin rose to 83.9 percent from 78.3 percent a year earlier. Pro forma operating income rose more than nine-fold year-over-year, to 27 percent of revenue compared to 12.2 percent in the second quarter of fiscal 1999.

"The strong leverage inherent in Go2Net's business model will continue to differentiate us as one of the Internet sector's few operationally profitable companies," said Russell C. Horowitz, chairman and CEO.

Average daily page views in March rose 177 percent year-over-year, to 34.9 million from 12.6 million. The company's payment authorization service picked up more than 12,000 merchants during the quarter and now has more than 70,000 businesses signed up.

Go2Net is one of the few Internet portals to be consistently profitable. The company has posted a profit in each of the last five quarters.

Among pure portal companies, only Yahoo! (Nasdaq: YHOO) has reported earnings longer than Go2Net. Lycos (Nasdaq: LCOS) recently turned profitable.

Shares of Go2net rose 7 3/8 to 55 1/4 in Monday's regular trading, ahead of the earnings report.

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