Since late 2005, shares of Convera (NASDAQ:CNVR) have plunged from $16 to $3.45. The company is in the midst of a radical restructuring, but Wall Street seems skeptical.

On Tuesday, Convera reported its fiscal-second-quarter results. Revenues came in at a mere $255,000, up about 275% year over year. Keep in mind that one customer accounted for 92% of revenue. Despite the growing sales, the company's hemorrhaging on the bottom line. Despite slashing costs over the past year, its fiscal Q2 net loss was still $6 million, or $0.11 per share.

In March, Convera agreed to sell its RetrievalWare enterprise search business to Fast Search & Transfer for $23 million, giving the company a current cash balance of about $54 million.

Convera's core product is a search platform for website publishers of trade business publications. The system helps customers build loyal user bases and expand advertising opportunities. For the most part, Convera gets anywhere from 20% to 50% of customers' advertising revenues.   

Convera is targeting a large market opportunity. According to Convera, the online business-to-business market in the U.S. and U.K. was $3 billion in 2006, and it's expected to grow to $6 billion by 2010. But the competition is intense, with players like Google (NASDAQ:GOOG), Yahoo! (NASDAQ:YHOO), and Microsoft (NASDAQ:MSFT) in the mix.

Convera has good technology, and it's beginning to win over customers, with 41 Convera search sites in the pre-launch phase. However, it's unclear how much revenue these sites will generate, and what size their margins will be. In truth, Convera's just a start-up, which spells considerable risk for investors.

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