Loudcloud seeks $150 million downpour

The year-old firm is braving a market that has lost much of its appetite for big-name IPOs in recent months, forcing several Internet firms to withdraw their plans to go public. The market has been more generous to infrastructure companies than to traditional Net content services, however.

In documents filed with the Securities and Exchange Commission (SEC), Loudcloud outlined its plans to fund a global Net infrastructure services business with the IPO proceeds. But it cautioned that like other Net start-ups, it doesn't expect to see profits anytime soon.

"We expect to continue to incur substantial operating losses for the foreseeable future," the company said in the documents. "Our expected increase in operating expenses will require significant increases in revenue in order for us to become profitable."

Included in the documents was information that the company had attracted Hollywood mogul Michael Ovitz to its board of directors. Ovitz has increasingly turned to Net interests in the last year, helping to fund companies such as Scour, a file-swapping service, and entertainment site Checkout.com.

Former Intuit CEO William Campbell has also joined the Loudcloud board of directors, the company said.

Loudcloud has garnered a high level of public and media attention since its inception--largely though the participation of big-name executives such as Andreessen, who brings considerable experience from companies like Netscape.

The company helps businesses develop and maintain a Web presence, providing monitoring and guaranteed service once the site is operating. Later this year it also will support applications service providers.

Loudcloud began offering its services to the public early this year, and had just $1.9 million in revenue for the six months that ended July. About 27 percent of its revenue for that period came from just two clients, it said.

The company has recently run into some opposition from several of its key data-center partners, who are moving in the direction of offering more ambitious Web services themselves. Although Loudcloud did mention this as a potential risk factor, executives have said they've had no problem finding data center and hosting space with other companies.

The company's documents also showed that Andreessen, who is currently Loudcloud's chairman, receives no salary from the company. The Netscape co-founder is the company's largest individual shareholder with a stake of 18.2 percent. Horowitz has an 8.8 percent stake.