Intermix On the Radar

Since Rosenblatt took over in February 2004, the company has found an experienced CFO, changed its name, sold off unprofitable businesses and won respected advertisers like Procter & Gamble , Nike and HSBC . He couldn't persuade Nasdaq to relist the stock, so the company listed it on Amex in November.

Just as important, investors say, is that he's turned around the company's finances. Last Monday, Intermix posted a net income of $38,000 in the quarter ended Dec. 31, reversing a loss of $2.1 million in the year-ago quarter as revenue jumped 44% to $20 million. While the marketing arm saw revenue rise a respectable 32%, the real potential lies in the entertainment sites, which posted revenue growth of 68% to $7.9 million.

Secret Sparkle

At Intermix, Rosenblatt reorganized the company into two businesses: The first is a network of sites grouped around MySpace.com, a community of 16- to 24-year-olds drawn by a shared interest in independent music, and a gaming community called Grab.com. The second is a subsidiary that markets products ranging from beauty creams to pet care on the Internet based on marketing data collected from its millions of members.

"eUniverse was a lot of varied concepts set up to make money from traffic on the Internet," says John Lewis of Gardner Lewis Asset Management, a firm that has held an investment in the company since 1999 and gone through what Lewis calls "extraordinarily hard times" to hold the stock. "The new management has done a good job of integrating those concepts into a coherent, self-sustaining whole."

The secret sauce in the company's sites is social networking, a technology that has the potential to change ad spending on the Internet. Anyone who's signed up for Friendster knows social networking. It's based on the six-degrees-of-separation concept that we're all more connected to each other than we think through our friends' friends. Friendster had mixed results applying the technology to online dating, but MySpace hit the jackpot using it on an Internet portal.