LiveDeal Takes Loss From Acquisition Costs

LiveDeal, which offers online classified ads and retail listings, as well as online marketing services for small and mid-sized businesses, reported a net loss of $1.5 million for its fiscal year, compared with $1.8 million in income during its fiscal 2007 year. The company’s revenue slipped from $26.3 million a year ago to $25.3 million. The year ended Sept. 30.

Much of the loss stemmed from an increase in management costs, which ballooned from $12.5 million in 2007 to $15.6 million during the year just ended. Additionally, the company’s sales and marketing expenses jumped from $6.5 million to $7.1 million.

During the year the company paid out $900,000 in termination costs associated with its former CEO, as well as at least $1.7 million in costs related to its acquisition of LiveDeal in 2007.

The company attributed the dropoff in revenue to a shift in focus from adding new customers to its basic directory business in favor of selling a new set of Internet audience acquisition services.

“We are making excellent progress at focusing LiveDeal's business toward considerable new opportunities we see in the local Internet advertising market,” said Mike Edelhart, CEO of LiveDeal Inc., in a statement.

Edelhart continued, “And even with a more challenging economic environment expected in 2009, we believe that the small and medium-size businesses that we are targeting will continue to turn to the Internet to find the customers they need.”

During the most recent fourth quarter, the company’s net revenue was $5.8 million, down from $7.1 million a year ago. It posted a net loss of $277,000, compared with net income of $376,053 during fourth quarter 2007.