GoTo (Nasdaq: GOTO) rose US$2.68 to $14.25in morning trading Wednesday, after reporting what the company termed”terrific” first-quarter results, and predicting higher revenue andsmaller losses for the rest of the year.
Merrill Lynch and Lazard Freres analysts reportedly upgraded shares of GoTo,a Pasadena, California-based provider of Internet search services, followingthe report. Merrill’s Henry Blodget was said to have raised his near-termrating on the stock from neutral to accumulate.
GoTo said that revenue for the quarter ended March 31st rose more than 200percent from a year earlier, to $52 million, but that the company ended up with a pro forma loss of$9 million, or 20 cents per share.
The net loss narrowed to $6.7 million, or13 cents per share, from $30.51 million, or 67 cents.
“Our terrific results demonstrate that we are successfully capturing thesignificant market opportunity presented by pay-for-performance search,”said president and chief executive officer Ted Meisel. “GoTo’s leadershipposition in this market has never been stronger, and I believe that we willcontinue to build on that position.”
GoTo said that it had about $53 million in cash and liquid investments atquarter’s end and less than $1 million of debt.
GoTo gets its revenue from “paid introductions,” or successful matchesbetween advertisers and potential customers. The company made 314 millionpaid introductions in the first quarter, up from 88 million in theyear-earlier quarter and 228 million in the fourth quarter of 2000.
Advertisers paid the company an average of 16 cents for each introduction,below the 19 cents paid during the year-earlier quarter and the 17 cents inthe fourth quarter. GoTo said that prices have “trended upward” since February.
GoTo said it expects revenue for the year as a whole of about $227 million,with a net loss of about $20 million. The company expects losses to shrinkeach quarter, and anticipates reaching breakeven in the fourth quarter.
Also Wednesday, GoTo said that its ChannelFusion auction-management software wascertified by eBay (Nasdaq: EBAY) for use on the Internet auction giant’s system.