The parent company of struggling web portal AltaVista has vowed to slash costs after revealing that its losses had more than doubled to $1bn in the last quarter.
CMGI, which holds a range of internet investments, saw its shares fall 59 cents to $3.55 yesterday, down from a year high of $61 last June. The once high-flying company has lost more than 90% of its stock market value since last year's dot.com crash.
The company lost $996m in the three months to the end of April, compared with $428m a year ago, as the value of its dot. com stakes slumped.
Investments in AdForce, which is to be wound down, Tallan, and Activate were all written down in the last quarter.
CMGI also owns significant stakes in Engage, the online marketer, and @ventures, the online incubator. CMGI's stake in the latter, which was once envied by executives around the world, is now valued at just $2.9m.
David Wetherell, CMGI chairman, said that the company had enough cash to last for three more years, as long as it continued to cut costs. "We continue to take actions to reduce our operating cash usage and we are vigilant about the preservation of our capital re sources," he said in a statement.
The company reduced its cash burn rate, the amount of money it uses to continue operations, by 31% in the third quarter to about $165m. Revenues rose 29%.
However, it offered a gloomy outlook for the rest of this year. In its conference call with analysts the company lowered forecasts for the current quarter, saying that business would be flat. Analysts had expected revenues to increase by 3% to 5% in the period.
Last week, AltaVista restructured its internal European sales force in response to market conditions.The web portal slashed 25% of its workforce in January, after the company pulled plans for an initial public offering. More layoffs in Europe are expected.
Shares in Loudcloud, set up by Netscape founder Marc Andreesen, fell 19% yesterday after the internet infrastructure services provider announced that losses had deepened to $60.3m in the first quarter.
• Lucent Technologies was under pressure again yesterday as Standard & Poor's cut the struggling telecoms equipment firm's debt ratings to junk status.
The downgrade came almost two weeks after the collapse of merger talks between Lucent and French rival Alcatel.
