Internet search engine Ask Jeeves (Nasdaq: ASKJ) gained 26 U.S. cents to reach $2.40 in early trading Thursday, after announcing proposed job cuts and reporting a pro forma loss of $14.4 million, or 40 cents per share, for the first quarter of 2001 on Wednesday.
The loss was narrower than the year-ago quarter, when the company reported a pro forma loss of $18.8 million, or 59 cents per share.
Ask Jeeves said it plans to lay off 75 employees, or 15 percent of its workforce. Company officials also said that they hope to reach pro forma profitability bythe fourth quarter of 2001.
Chief executive officer Skip Battle said that Ask Jeeves is making progress in streamlining operations while continuing to make investments for growth. Battle also said the company should be able to ride out downturns in the economy.
The search engine, popularly identified by its cartoon butler mascot,reported revenues of $19.1 million through the first three months of 2001,down from $23 million for the fourth quarter of 2000. The results, however, were up from the year-ago quarter, when the company reported $17.8 million in revenues.
Company officials said the job cuts will result ina charge of about $2 million in the current quarter. They also said the new round of job cuts, combined with other reductions,should save the company about $50 million.
“The reduction of our workforce is a proactive effort that gives us improvedflexibility in either a challenging or a thriving market,” Battle said. “Themajority of the eliminated positions are a result of the continuingimprovements in the automation of our tools and technology.”
Company officials are projecting a pro forma net loss of about $12 million,or 33 cents per share, for the second quarter of the year, on revenues of about$17 million.
Ask Jeeves is also making some personnel changes.
Battle and chief financial officer Steve Sordello have both assumed permanent management roles in thecompany, officials said. Before the announcement was made, Battle and Sordello were acting CEO and CFO, respectively.
Steve Berkowitz, former chief operating officer of IDG Brook, has joined Ask Jeeves as president of its Web properties division. Ask Jeeves said that its president, Adam Klein, has resigned.
Despite the poor financial results, Ask Jeeves is apparently gaining popularity among Net surfers. The company was ranked the No. 1 search engine on the Web, according to aMarch report by Jupiter Media Metrix, Ask Jeeves said.
The company also reported 14.05 million unique visitors during the firstquarter of 2001, an 18 percent increase from the fourth quarter of2000, making the company the 17th most visited Web site, according to theMedia Metrix report.