Mamma.com Swings to Profit

Updated from Aug. 11

Mamma.com (MAMA Quote) dropped 15% Thursday as the summer tech selloff continued.

The setback came a day after the company reported that it swung to a second-quarter profit as revenue nearly doubled from a year earlier.

For its second quarter ended June 30, the Montreal-based Internet search engine earned $108,387, or a penny a share, reversing the year-ago loss of $442,924, or 7 cents a share. Revenue jumped to $4 million from $2.1 million a year earlier.

"We are especially pleased with the growth of our ad network, which realized a revenue increase of 62% from the same quarter last year," said CEO Guy Faure. "The completion of our acquisition of Digital Arrow further enhances our revenue stream and enables us to complete our one-stop-shop offer to online advertisers.

"Finally, we completed a gross $16 million financing this quarter, which brings our cash position to more than $27 million," the executive added. "This will enable us to execute on our aggressive acquisition strategy where we are looking to grow the company by acquiring companies that will be highly synergetic with our existing offerings and that at the same time will significantly increase our revenues and be accretive to earnings."

Mamma shares ran up sharply this spring during Wall Street's latest brush with Internet fever. But the stock has slid sharply since then as valuation and competition concerns sweep the richly priced sector. Mamma has been particularly hard-hit ever since Dallas Mavericks owner Mark Cuban sold his shares in the company after its shifted its growth strategy.

Mamma shares, which traded around $12 ahead of Cuban's July 2 disclosure, dropped 90 cents Thursday to $5.20.