NBCi sees slower sales, wider losses ahead

NBC Internet said late Monday that it will report lower-than-expected sales and earnings in its second quarter and throughout the rest of the year due to sluggish online advertising sales and costs associated with the revamping of its business operations.

Ahead of the announcement, NBCi (Nasdaq: NBCI) shares closed off 1 13/16, or 7 percent, to 24 5/8.

In announcing what it called "major refinements" to its business, product and branding strategy plans, NBCi said it had $700 million in cash and NBC promotion credits at its disposal to weather some tough months and quarters ahead.

It also said it would "tighten" its cost structure to turn a profit in 2002.

This new-look NBCi will include all of NBCi's consumer portal, utility and entertainment properties -- including Snap.com and Xoom.com -- in a single integrated NBCi.com offering, expected to launch in the fall.

Company officials said the new NBCi.com portal will act as an infomediary agent for users -- providing access to information, transactions and entertainment resources on the Internet. A strong focus on personalization and application of collaborative filtering technology will ensure the relevance of content and services to consumers.

NBCi plays in a crowded portal space that includes industry giants Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), Lycos (Nasdaq: LCOS) among others. Disney's Go.com (NYSE: GO) recently refocused to stand out from the pack.

"NBCi is focusing its business and unifying its brand strategy under NBCi.com, the most powerful brand in our network of properties," said CEO William Lansing in a prepared release. "We are doing the post-merger integration to create an integrated portal that offers industry-leading relevancy, personalization and data mining, adding value to the interaction between our members and our marketing partners."

In its latest quarter, NBCi posted a loss of $37.4 million, or 67 cents a share, on sales of $30.1 million.

First Call Corp. consensus was expecting a second-quarter loss of 70 cents a share and a loss of $2.84 a share in the fiscal year. Those figures will surely be revised higher in the next few days.

After jumping to an all-time high of 106 1/8 in January, NBCi shares came crashing down to a low of 16 1/16 in May.

Before Monday's announcement, all seven analysts following the stock maintained either a "buy" or "strong buy" recommendation.

The company will further detail its new business plan and outlook in conference call Tuesday.