NBCi sees shortfall

June 12, 2000: 8:11 p.m. ET

Company sees lower revenue, earnings; plans broad restructuring
By Staff Writer Richard Richtmyer

NEW YORK (CNNfn) - NBC Internet Inc. on Tuesday said its revenue and earnings for the remainder of the year will be lower than expected, and unveiled a restructuring plan under which all of its Web properties will be combined under a single banner.

The San Francisco-based Internet media company said the anticipated revenue and earnings shortfall is due to the restructuring, the impact of the recently closed acquisitions of AllBusiness.com and Flyswat, and lower-than-expected revenue from Internet advertising.

NBCi (NBCI: Research, Estimates) had been expected to post a net loss of 70 cents per share in the second quarter and a full-year net loss of $2.84 per share, according to a consensus of analysts estimates compiled by earnings tracker First Call.

"We're proactively focusing the business on a new product strategy and a new brand, and with that will come some effects on the finances," Robert Silverman, an NBCi spokesman, told CNNfn.com.

NBCi shares slipped 1-13/16, or 6.9 percent, to 24-5/8 in light-volume Nasdaq trade ahead of the announcement. They plummeted another 7-5/8, or 31 percent, to 17 in after-hours trade.

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Silverman did not provide any further details about the extent of its expected shortfall, but he said NBCi executives plan to host a conference call with Wall Street analysts at 8:30 a.m. EDT on Tuesday, which also will be accessible live on its corporate Web site.

Under the restructuring plan, expected to be completed in the fall, all of NBCi's Web sites and products, including Snap.com, Xoom.com and VideoSeeker, will be combined under a single portal, NBCi.com.

By doing so, the company is shifting its revenue strategy to provide targeted advertising and services to its users. The new site will broker content and commerce transactions between consumers and NBCi's partners, yielding performance-based advertising, e-commerce and direct marketing revenue streams, Silverman said.

"We're refocusing the strategy around the notion of being your personal agent on the Internet, delivering content and services and e-commerce opportunities that are highly relevant to your interests," he said.

NBCi was launched in November 1999 through the combination of Snap, Xoom.com, NBC.com, NBC Interactive Neighborhood, VideoSeeker, and a 10 percent equity stake in CNBC.com.

NBC, a subsidiary of General Electric (GE: Research, Estimates), holds a 40.3 percent ownership stake in the company.

The company currently has approximately $700 million in cash and future NBC promotion credits, which it said will help it move forward with its new strategy refinements and reach profitability. The company expects to be profitable, after accounting for non-cash expenses, in 2002.