By Stephen Phillips
Internet infrastructure software firm, Inktomi Corp posted a slightly smaller than expected net loss for its fourth quarter based on revenue up 217% on the year-ago period. Revenue growth was driven by an even growth in sales across the firm’s internet portal services products and web caching software.
Inktomi, based in Foster City, California, reported a net loss of $4.9m, or 9 cents a share, for the quarter to September 30, compared with a loss of $8.5m, or 18 cents a share, for the corresponding period last year. Analysts polled by First Call had, on average, tipped the firm to lose 10 cents a share. Revenue for the quarter stood at $26.2m, up from $8.3m in the year-ago, and representing a 34% increase over the preceding quarter.
The firm said it had generated $15.4m in revenue from sales of what it called its network products, largely based on the Inktomi Traffic Server, web caching software – up 267% on the year-ago. Sales for its portal services, including search engine and directory services, were up 266% to $10.6m, the firm said.
Executives said Inktomi’s web cache installation at AOL now recorded 3.3 billion hits a day from a standing start when operations began in the year-ago quarter. Meantime the Inktomi Search Engine began managing queries across America Online’s AOL, AOL.com and international sites during the quarter, the firm said, processing around 2.9 billion queries – up 20% from 2.4 billion in the previous quarter. The firm said it had notched 12 new customers for its search and directory engines during the period and was continuing a thrust to sign up portal sites for its specialist shopping search engine. Executives trumpeting a new deal to power Ameritech’s yellowpages.net shopping site, said they anticipated increased consumer take-up of online shopping during the upcoming Christmas retail season.
The firm said it had reduced the cost of running the super computers needed to power its search and directory engines on customer web sites from 23%, as a proportion of total revenue, in the year-ago to 17%, despite increasing the number of nodes from 400 to 700 to handle increased traffic.
Executives said Inktomi would announce a major venture before the end of the year to pitch a modified version of Traffic Server at large companies. They said the diversification beyond Inktomi’s core customer base of internet service provider and large telecommunications firms could be achieved cheaply because the new products would use existing line of code.
The quarter did not see the closure of any acquisitions but in September the firm announced an agreement to acquire web and application distribution software firm, WebSpective Software Inc. Executives said yesterday that they planned to account for the $106m deal as a pooling of interest, a mechanism which allows goodwill payments (the amount paid for a firm over and above its asset value) to be written off in a single quarter, rather than dragging down results over successive quarters.
Inktomi said it was deriving increased cross-sales across it s products range particularly from customers requesting bundled search and directory products. Executives said a stock offering of 2.4 million shares had reaped $16.2m in cash to be used in business expansion. For the fiscal year, Inktomi lost $24.2m, or 48 cents a share, on revenue of $71.2m. This represented a 248% revenue leap versus fiscal 1998, when it lost $24.5m, or 63 cents a share, on sales of $20.4m.
