Ticketmaster Online-CitySearch Inc. may have the most ungainly name of any Internet company around, but that hasn’t stopped it from retaining market interest.
Like other technology firms, the online provider of local city guides, personal advertising and live event ticketing has undergone a bumpy ride in recent months.
But the combination of strong online ticket sales thanks to its Ticketmaster operation and its burgeoning city guides have put the company in a strong position to be the biggest Internet service of its kind.
Late last week, its stock was trading at around $40, well above its low so far this year of just under $30.
“We believe TMCS is executing its model well,” said Michael Graham of Robertson Stephens in San Francisco. “All metrics are being hit or surpassed.”
But that doesn’t mean the company makes money. For the fourth quarter ended Dec. 31, the Pasadena-based firm posted a net loss of $48.9 million (58 cents per diluted share) compared with a net loss of $16.9 million (26 cents) for the like period a year earlier.
Revenue was $36.4 million vs. $13.6 million a 168 percent gain that was above the consensus estimate of around $30 million.
That showing and other key indicators have Ticketmaster Online-CitySearch executives using a word that most Internet companies are unlikely to utter these days: profit. The company projects that by the second half of 2001, it will be making money.
“When we started in 1995, we dreamed of building a company with over $100 million in revenue that would be profitable,” said Chief Executive Charles Conn. “We’re part of the way there.”
Analysts seem to agree, projecting revenues this year of around $180 million and $270 million in 2001.
Two of the three main businesses are already in the black ticketing and personal advertising, Conn said. The third CitySearch guides, which direct users to local restaurants, concerts and other events is where TMCS places most of its resources.
A total of 25 city guides were rolled out in 1999, which was “extremely costly,” said Chief Financial Officer Thomas McInerney. It now has the guides in 40 cities nationally and seven internationally.
The company is the dominant player in the online city guide market, reflected last year by the acquisition of Microsoft Corp.’s Sidewalk, a local arts and entertainment service. In return, Microsoft got a 9 percent stake worth around $280 million.
With the service gaining popularity, the company is expanding its existing city guide Web sites, offering local services such as restaurant reservations, car registration and grocery delivery.
Ticketing, of course, remains the cash cow, accounting for $21 million in revenue in the most recent quarter, up 262 percent on year. It helps that Ticketmaster is also the best-known off-line seller of event tickets.
But analysts and company executives agree that the name Ticketmaster Online-CitySearch is a mouthful, especially for the Internet generation. When CitySearch merged with the online ticketing arm of Barry Diller’s USA Networks Inc. in 1998, it was perhaps a necessary, short-term solution.
“The name is distracting,” Graham said. “We’re talking about a genuine case of brand schizophrenia.”
He believes CitySearch would be the logical choice. Company executives acknowledge the problem, without saying what changes might be made. “The name is too long,” McInerney said. “We’re sorting through our options now.”
That isn’t stopping the company from continuing to push its current brand. Late last month, TMCS said customers who purchase its tickets online (and receive them in the mail) will soon be able to download and print bar-coded event tickets from their personal computers, using technology the company has been developing for five years.
And there are continued benefits from the deep pockets of its largest shareholder. Last quarter, it received a $40 million investment from USA Networks, increasing the media giant’s stake in the company to about 52 percent.
“Diller said to us, ‘Get big, get national and do it now, don’t worry about the cost side,'” McInerney said.
