Excite proves that it is a little engine that can. Rising revenues and page turns help it beat out Infoseek to become the No. 2 search engine.
But not all the news is good. While revenues were up 61 percent in the last three months of 1996 compared with the previous quarter, the company lost $12.7 million, or $1.06 per share, including a $4.3 million charge for its acquisition of the rival WebCrawler search engine from America Online. The quarterly loss also includes about $5 million for Excite's brand advertising. Analysts had expected a loss of 48 cents a share.
Excite's stock closed today at 18-3/8 on heavy volume, up 1-5/8 points from yesterday's close. Search engine competitor Yahoo (YHOO) ended the day at 33-7/8, up 3/8, while rival Infoseek (SEEK) finished at 10, up 11/16. Lycos (LCOS), due to report earnings February 24, was off 1/8 to 16-7/8.
Without Excite's acquisition and ad charges, its quarterly loss would have been $3.4 million, and the company reported $22.3 million in cash at year's end.
"Excite went from back-of-the-pack status at beginning of 1996 to close to the front-runner in the end of 1996," said George Bell, Excite's president and CEO. He said a five-year distribution deal with AOL will continue Excite's forward momentum, particularly when Excite becomes AOL's exclusive search and directory service next month.
Excite also is "rethinking our reviews and directory strategy," Bell said, but no new service has been announced. However, he said six or eight part-time editors in its editorial group have been asked to take full-time positions or leave the company when it moves to larger quarters in Redwood City, California, this spring.
Bell also claimed for Excite the No. 2 status among Internet search engines, behind Yahoo but ahead of Infoseek based on 1996 revenues and page views.
Earlier this week, Infoseek reported a net loss of $3.95 million, or 15 cents a share, for the quarter ending December 31, beating analysts' expectations of a 17-cent loss per share, according to First Call. Infoseek's revenues for the quarter climbed to $6.1 million, up from $695,000 a year ago.
On January 15, Yahoo surprised investors by reporting a small profit of $96,000 on revenues of $8.5 million. Since then its stock has soared $13.
In the third quarter, Excite lost $9.4 million, or 78 cents a share, including a one-time charge of $2.3 million for acquiring McKinley Group and its Magellan Internet Guide search and directory service.
In 1995's last quarter, Excite lost $3.5 million, or 31 cents a share, on $574,000 in revenue.
For calendar 1996, Excite reported revenues of $14.8 million and a net loss of $43.1 million, or $3.65 per share, including acquisition charges of $6.8 million.