Tech Industry losses widen in 3Q (Nasdaq: MDCM) said Friday its third quarter operating loss was $16.4 million, or 59 cents a share.

Shares were up 5/8 to 11 1/4 in early trading Friday, having settled down since they saw a pop from its post-IPO quiet period.

Revenue increased 28 percent to $12.3 million over last year's comparable period. Net loss, excluding the amortization of non-cash stock-based compensation and extraordinary loss on early extinguishment of debt, was $16.4 million, or 59 cents a share, compared with a net loss of $1.3 million or 24 cents a share in the same year-ago period. A large chunk of loss came from marketing costs, up to $8.6 million compared to last year's $454,000. General and administrative costs also rose compared to last year's quarter, reaching $5.1 million.

The results blasted First Call's predicted loss of $1.05 a share, which was based on the consensus of two analysts. Including amortization of stock-based compensation and extraordinary items, the second quarter 1999 net loss was $23.0 million, or 85 cents a share.

Loan production volume for the third quarter increased 34 percent to $687 million on 3,592 loans over last year's comparable period loan volume of $512 million on 2,748 loans. achieved this growth despite the industry-wide drop of 21 percent in mortgage applications, due to rising interest rates.

About 1 percent of the $1 trillion in mortgages underwritten in the U.S. in the past year originated on the Internet. That figure is expected to grow to 10 percent over the next several years, according to estimates by Forrester Research.

Competing online lending company E-Loan (Nasdaq: EELN) also edged past the consensus forecast in the third quarter. Shares have spiked up since the Thursday earnings report, and closed at 21 3/4 Thursday.'s growth came from its business-to-business strategy, which enables the mortgage industry to make the shift to the Internet, said Seth Werner,'s chairman and chief executive officer. "Essentially all of the other online players are carving out niches for selling directly to consumers themselves, competing only with our direct-to-consumer group,'' he added.

Revenue in's business-to-business segment increased 56 percent to $9.5 million for the third quarter, as it allowed other companies to offer mortgages online using its technology and mortgage banking resources.