Last August, Interland
A former senior vice president of United Online
Yet the financials are still problematic. In the fourth quarter, the company posted revenues of $12.1 million, which was down from $20.6 million. Why the huge shortfall? Much of it stemmed from the sell-off of Interland's dedicated server business.
However, the company lowered its net loss from $6.2 million to $2.6 million. EBITDA came in at negative $1.3 million (which includes a $0.8 million restructuring charge), an improvement from the year-ago loss of $2.1 million. In all, the company has about $23.3 million in the bank.
Of course, cost-cutting can go only so far. Thus, Stibel is trying to bolster the top line. He struck a deal with R.H. Donnelley
With its existing infrastructure already in place, it's fairly easy for Interland to scale large numbers of subscribers. So it's no surprise that the company is now concentrating on prudently and effectively growing its subscriber base. That's why it sold off its cash-intensive dedicated server business. Through careful spending, the company was able to reduce subscriber acquisition costs by 35% over the past quarter.
In addition, Interland purchased Web.com for $4.4 million. It will be adopting Web.com's name along with its 9,000 individual hosting accounts and domain-name registration business. A name change is often a non-event, but in the case of Web.com, it looks like a smart move. After all, how many people think of Interland when they want to purchase a domain name or a website?
As with most turnarounds, this one will take time, but it appears that the business has stabilized. The company is fundamentally shifting its marketing approach from its formerly narrow, tech-intensive brand to a more open company in search of new subscribers. More importantly, the former Interland appears to be focused intensely on generating a profitable business. Given its new focus, it just might work -- and finally provide some rewards to shareholders in 2006.
Fool contributor Tom Taulli does not own shares mentioned in this article.