Internet investment firm CMGI Inc posted fourth-quarter profit of more than 16% ahead of analysts’ expectations – as a slew of one- time investment gains turned an operating loss into a soar-away profit. In the three months to July 31, $745m poured into CMGI’s coffers from initial public offerings and sales of its internet holdings turning a $51.4m loss from the operation of its portfolio of businesses into a $452.7m net gain. In the year-ago quarter the firm cleared a net profit of just $27m or 28 cents a share.
Andover, Massachusetts-based CMGI said in an after-hours briefing last night, that it had realized a $661m gain from the conversion of its interest in GeoCities acquired by Yahoo! Inc. Among other headline gains, it drew $81.1m from an IPO of Engage Technologies Inc; and $53.2m from the sale of CMG Direct to Marketing Services Group Inc. Revenue stood at $53.6m for the quarter – a 107% increase on the year-ago quarter; and a 17% sequential gain over the third quarter ended April 30. CMGI invests in internet and software firms, incubating them with the goal of either taking them public or selling at profit to other investors.
Meantime, it also announced that it had agreed to buy free internet service provider 1stUp.com, a seven-week-old start-up, for an undisclosed fee. San Francisco-based 1stUp provides CMGI affiliate, AltaVista, the web portal, with its advertising- subsidized free internet access service. The infant firm has also struck a deal to tout its service on Bolt.com, a portal aimed at the lucrative teenage market. The acquisition cements CMGI’s quest to penetrate its portfolio into the consumer market. 1stUp functions as a wholesaler enabling portals to offer free own- brand ISP services and will be leveraged across CMGI’s holdings. The single largest trend affecting ISPs low cost internet access and we’ve been anticipating an building for this eventuality for years, CMGI chief executive David Wetherell said yesterday. รก
