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CNet Posts a Massive Loss

The media-and-technology firm feels the effects of a slowing economy.


(CNET) - Get ChinaNet Online Holdings, Inc. Report

came close to meeting revenue estimates for its third quarter despite a slowdown following the Sept. 11 terrorist attacks.

But the online technology news and information company, which reported $69.3 million in revenue for the quarter, posted a $1.4 billion loss, with $1.1 billion of that coming from a noncash charge to write down the value of acquisitions the company made when its stock was more richly valued.

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Ahead of the postmarket release of financials, the company's shares fell 22 cents to $4.93. In after-hours trading on Island, the stock changed hands at $4.82.

In a conference call with analysts, CNet executives were more bullish amid the current economic environment than one might expect from a company that's advertising-dependent, technology-focused and Internet-based.

Though the company indicated it expects the depressed economic environment to continue, it suggested that it had pared costs enough and was strongly positioned in the tech sector to prepare for a recovery in the online advertising market.

CNet's revenue came in just below the $70 million figure the company forecast three months ago; the company said it estimated it lost $1 million in lead-generation business in September following the terrorist attacks. The corresponding revenue figure for the third quarter of 2000 was $110.5 million.

The company said it expected fourth-quarter revenue in the range of $70 million to $75 million, and losses before interest, taxes, depreciation and amortization of $2 million to $7 million. The company, which had $230 million in cash and securities on Sept. 30, expects to end the year with more than $200 million. It declined to make any forecasts for 2002.