Jupitermedia's 2Q revenues of $34.7 million fell short of the company's projections of $36 million to $37 million. While total revenues were slightly below first-quarter earnings, revenues from images have risen from last year.
Jupiterimages revenues of $27.4 million accounted for nearly 80% of all Jupiter income and have grown by $576,000 since the second quarter of 2006. In contrast, online media business revs - which include the Internet.com, EarthWeb.com, DevX.com and Graphics.com networks - have dropped by close to $1 million.
The company reports 30% growth of the rights-managed image business since last year. JupiterimagesUnlimited, a royalty-free subscription service, has grown more than 200%. The company plans to continue focusing its sales efforts on these two areas.
While Jupiter's revenues can be characterized as steady if not improving in the company's largest sectors, profitability has plummeted. The net income of $619,000 is 74% below the second quarter of 2006. Consequently, the company's stock price is sliding, hovering around $6 on the day after revenue reports.
Jupiter's CEO Alan Meckler characterizes the current business climate as challenging for the stock-licensing industry. In a recent blog, he wrote: "One never knows when a college kid is going to invent something that will blow an established player out of the water. ... think of the microstock revolution and what it has done to selling single royalty-free images."
In the statement accompanying Jupitermedia's revenue report, Meckler promises to improve the profit margin. The company will continue to invest in its faltering media division, building on the second-quarter launch of a new Web video trade show and the addition of Mediabistro to its array of online properties.
In addition, Jupitermedia will endeavor to cut operating expenses, up by 6% this quarter, by $2 milllion to $3 million starting in the third quarter. It will also streamline various capital projects and content production, resulting in an estimated savings of $3 million in cash expenditures.
Combined, the two initiatives are expected improve post-tax cash flows by $4 million, according to Meckler. It is unclear whether layoffs are part of the cost-cutting plan, as was the case at Corbis and Getty Images. Meckler has publicly criticized such layoffs, offering the dismissed Corbis and Getty staffers jobs at Jupiter.