The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
Fewer site visitors and a Google search penalty account for the slower growth.
It was an almost flat second quarter for Overstock.com Inc. with sales in the quarter growing year over year by just under 2%.
• Sales increased 1.6% to $235.0 million from $231.3 million in the second quarter of 2010.
• Sales and marketing spending decreased year over year 3.5% to $13.7 million from $14.2 million.
• Technology expenses grew 18.3% to $16.8 million from $14.2 million in the second quarter of 2010.
• General and administrative expenses grew year over year 15.2% to $16.7 million from $14.5 million.
• Net loss was $7.8 million compared with a net loss of $1.3 million in the prior year.
Overstock, No. 27 in the Internet Retailer Top 500 Guide, attributed slower sales to several factors, including fewer unique site visitors compared to last year and the search-ranking penalty imposed by Google between February and April after Overstock solicited inbound links to boost its rankings—a practice that violated Google rules.
For the six months ended June 30, Overstock also reported:
• Revenue of $500.5 million, up 0.8% from $495.6 million for the same period last year.
• Net loss of $8.2 million, compared with net income of $2.4 million for the prior year.