Shares of Commerce Planet (OTCBB: CPNE) were up 7 cents, nearly 9 percent, to 89 cents Monday afternoon, moving on volume of 1.1 million. Yesterday, the company announced it expects second-quarter revenue to increase 48 percent to 55 percent, as compared to the same period last year.
In a statement, the Internet-based media company said it expects revenue for the period ended June 30, 2007, to increase to $10.5 million, up from $7.1 million the year prior.
“We are pleased with our preliminary results for the second quarter, which reflect the success of our initiatives to increase the quality of our sign-ups and position the company to become a leading online media company,” said Michael Hill, CEO of Commerce Planet, in a statement.
Hill said the increased results for the second quarter are a reflection of a reduction in advertising costs which allowed the company to direct its focus toward marketing investments that resulted in higher-quality sign-ups.
“This strategy was to offset the increase in poor quality sign-ups we, and the industry overall, was experiencing in the first quarter of the year. While membership revenues were sequentially lower during the second quarter as a result of our lower advertising spend, we did generate significant income and will have more than doubled our revenue and nearly tripled our income for same period, last year,” said Hill. “Additionally, we believe we have re-established a better quality revenue stream and thus positioned ourselves for more sustainable long-term growth.”
In the same statement, Hill said the lower-quality sign-ups resulted in an abnormally high return and chargeback rates, negatively impacting costs; still, the company expects to increase its revenue from last year.
“During the quarter we strategically refocused the company on lead generation and data acquisition by launching new Web properties, expanding our Costa Rican call center and augmenting our customer tools with White Email Deployment Network,” said Commerce Planet President Charlie Gugliuzza, in the statement. “Also, subsequent to the end of the quarter, we expanded our marketing efforts in video ad serving and lead generation through the launch of MyFlick.com. These initiatives will further strengthen our competitive advantage as we continue to transform Commerce Planet into a leading online media company. Furthermore, we have taken action to help qualify the customer leads at the point of acquisition by implementing a series of customer verification tools.”
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