AG Interactive, the e-commerce business unit of American Greetings Corp., is reporting minimal web revenue growth for the second quarter of the 2007 fiscal year.
For Q2 AG Interactive, No. 132 in the Internet Retailer Top 500 Guide to Retail Web Sites, reported e-commerce revenue of $20.4 million, an increase of just 4.4% from $19.6 million in Q1 of FY 2006. Additionally, AG Interactive reported net income of $1.2 million in the second quarter vs. $526,000 during the same quarter the previous fiscal year.
“In our AG Interactive business, the online product group continued to show sales growth from both advertising and subscriptions,” American Greetings says in its recently filed quarterly report. “The improvement in subscription revenue stems from both the ongoing business and the acquisition of an online greeting cards business during the second quarter. This increase was partially offset by continued shortfalls in the mobile product group.”
In the second quarter AG Interactive and American Greetings spent $21.7 million to acquire a yet-to-be-identified online greeting cards site. The company paid $15 million in cash and approximately $6 million for what American Greetings calls “accured liabilities” for the acquisition.
American Greetings also says it had approximately 3.3 million online paid subscribers in Q2 2007 vs. 2.3 million in Q2 2006.