Losses Mount At CMGI



CMGI Inc., which owns tech businesses such as online advertising provider Engage Inc. and search and portal vendor AltaVista, is still in a severe slump. The company last week reported a net loss of $1.28 billion for its fourth quarter ended July 31, an increase from its loss of $963.3 million in the previous quarter. Revenue for the quarter was $255.5 million, down 12% from the previous quarter. For the fiscal year, revenue was $1.24 billion, an improvement from $890.4 million for fiscal 2000, but net losses totaled $5.83 billion vs. $2.19 billion the previous fiscal year.

Most of the losses are tied to the declining value of CMGI operating companies focused on troubled areas such as Internet professional services and interactive marketing. CMGI (CMGI-Nasdaq) faces heavy operating losses--$1.05 billion for the quarter--as it works to shut down struggling businesses, says Safa Rashtchy, a senior analyst at U.S. Bancorp Piper Jaffray. He says CMGI's new CFO, George McMillan, must take "much more drastic actions" to preserve as much of its $700 million in cash as possible--CMGI says it expects to lose $400 million of its capital in the next 12 months. Bright spots for CMGI include Ubid .com, an auction site that sells PCs and used equipment, and SalesLink, a fulfillment house for gift sellers and other businesses.

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