Financial: XOOM.com Announces Record Fourth Quarter Revenues; 50% Increase in Revenues Over Last Quarter, 722% Increase Over the Same Period Last Year - Company Financial Information

EDGE, On & About AT&T, Jan 25, 1999

XOOM.com (Nasdaq: XMCM), a leading internet based direct e-commerce company, Wednesday announced its financial results for the 4th quarter ended December 31, 1998. The Company reported revenues of $3.5 million for the 4th quarter of 1998, an increase of 50 percent over revenues of $2.3 million for the 3rd quarter ended September 30, 1998, and an increase of 722 percent over revenues of $0.4 million for the 4th quarter of 1997.

For the quarter, the Company reported a net loss of $2.9 million, or $0.29 per diluted share, excluding a $1.5 million nonrecurring, noncash charge for the issuance of warrants, as compared to a net loss of $3.1 million, or $0.35 per diluted share for the 3rd quarter of 1998, and a net loss of $0.5 million, or $0.09 per diluted share for the 4th quarter of 1997. Giving effect to the warrants charge, the net loss for the quarter was $4.4 million, or $0.44 per diluted share. In addition, the Company reported annual revenues of $8.3 million for 1998, an increase of 889 percent over annual revenues of $0.8 million in 1997. The Company reported a net loss for 1998 of $9.3 million, or $1.18 per diluted share, excluding a $1.5 million nonrecurring, noncash charge for the issuance of warrants, as compared to a net loss of $3.1 million, or $0.64 per diluted share for 1997. Giving effect to the warrants charge, the net loss for 1998 was $10.8 million, or $1.37 per diluted share. "We are very pleased with our revenue performance during the 4th quarter," said Laurent Massa, Chief Executive Officer. "The increases were in both on our direct e-commerce and advertising areas. E-commerce accounted for 64 percent of our revenues in the 4th quarter. "In addition to growing our revenues this quarter, we have made important strides in positioning XOOM.com as a direct e-commerce company on the Internet. Building on this, we intend to further concentrate our efforts on e-commerce and direct one-on-one relationship marketing to expand on the success we have already seen so far. "Equally important, we have seen a steep increase in membership, another key metric," said Massa. "Membership grew at about 20,000 per day during the fourth quarter, and the finalization of the Pagecount acquisition has added about 200,000 new members." The Company also reported that membership as of December 31, 1998 grew to 5.4 million, compared to 3.6 million as of September 30, 1998, a 50 percent increase. According to Media Metrix, an Internet measurement firm, XOOM.com was ranked 13th among all Web properties in combined reach among home and work users during the month of November, giving XOOM.com a 15.4 percent reach. To create a foundation for continued growth in revenue, members and reach, Massa said: "XOOM.com is committed to providing a great array of free services and attractive deals to its members. We want people to realize that they can come to XOOM.com for great free services as well as great deals on products and services. We are pleased that we have completed much of the groundwork to make that a reality for our members during the fourth quarter." Shares of XOOM.com's common stock began trading on the Nasdaq Stock Market on December 9, 1998. XOOM.com's offering, managed by Bear Stearns & Co., Inc. and Deutsche Bank Securities, grossed $64.4 million on the sale of 4.6 million shares of common stock at $14.00 per share. To bolster XOOM.com's direct e-commerce sales of software, in December the Company selected leading Internet-based software retailer BUYDIRECT.COM to provide co-branded software for the XOOM.com network of sites. This collaboration provides XOOM.com members with an opportunity to select software titles from the broadest selection of leading publishers available online. Last quarter, XOOM.com also finalized the transition of the acquisition of Pagecount, Inc. The acquisition enabled the Company to launch XOOMCounter With Power Stats. This dramatically expanded XOOM.com's services to homepage builders. Using this technology, homepage builders can now implement a guest book and statistically track the traffic on their Web sites. As part of the arrangement, XOOM.com also acquired Pagecount's advertising network, thereby adding banner space on more than 200,000 Web sites to the Company's advertising inventory. About XOOM.com, Inc. XOOM.com, Inc. (www.xoom.com) offers consumers free services over the Web, including home page building, chat rooms, message boards, HTML email, online greeting cards, and content, such as full-length streaming movies and one of the largest collections of Web clips on the Internet. XOOM.com has pioneered direct-response selling on the Internet by selling its proprietary products as well as third party products to its registered members. The company, which was founded in September 1996, is headquartered in San Francisco and has an advertising sales office in New York.