Doubleclick Inc - Ad Revenue Expected To Decline In 2001

DoubleClick ended 2000 with total revenue of $505.6 million, up from $258.3 million in 1999. The company, which had not turned a profit in its five-year history, reported a net loss of $156 million for 2000, compared to a net loss of $55.8 million in 1999. Nevertheless, the company was optimistic about its financial position. It achieved its first-ever profitable quarter in the third quarter of 2000 and broke even in the fourth quarter. Its market capitalization was $1.75 billion in December 2000, and the company said it had close to $900 million in cash.

For 2001 DoubleClick projected that advertising revenue, which accounted for about half of the firm's revenue, would decline 25 to 30 percent in 2001. The firm lost its AltaVista account, and the Internet economy in general was expected to experience a downturn. DoubleClick's remaining revenue came from its data and technology divisions. As a cost-cutting measure, DoubleClick laid off about 200 workers, or 10 percent of its workforce, in March 2001. Meanwhile, the company was planning to invest heavily in e-mail marketing. In March 2001 DoubleClick announced it would acquire Toronto-based FloNetwork Inc., a rapidly growing e-mail marketing technology provider that delivered more than 540 million e-mail messages for 125 clients in the fourth quarter of 2000. The acquisition positioned DoubleClick to become a leader in e-mail marketing. Prior to the acquisition DARTmail had scaled to deliver more than 150 million e-mail messages a month.