Net income declines for both the second quarter and the first half of 2006 have led commercial and consumer database company InfoUSA to institute a hiring freeze, the company announced Friday.
Net income for the second quarter of 2006 was $3.2 million, down 49.8% year over year, while net income for the first half of the year was $11.1 million, off 27.7^ from the same period in 2005.
The declines came despite revenue increases in both the quarter and the half. Q2 2006 revenue at the Omaha-based company was $100.3 million, up 7% from $93.7 million for the same quarter last year. First-half revenue was $203.4 million, a 7.7% increase from $188.3 million in the first six months of 2005.
In a statement, InfoUSA CEO Vin Gupta attributed the decline in second-quarter net income to the company’s increased investment in advertising and marketing for its subscription products and to seasonal losses in its list brokerage business. He said InfoUSA also spent $1.7 million in Q2 2006 on the proxy battle in which minority shareholders attempted to oust Gupta and other board members.
Gupta said the company is taking steps to cut costs in many of its operations and is examining marketing expenses to eliminate underperforming efforts. “In addition, we have initiated a hiring freeze and are reducing overhead costs in divisions that are not growing,” he said.
Going forward, InfoUSA will rely on developing new products and new markets, including international growth, and will push to increase its market share through complementary acquisitions, the company said. It will also continue to emphasize advertising and corporate branding.
InfoUSA spent $2.9 million more in advertising in Q2 2006 than it spent in the same quarter last year, and increased its first-hall ad spend by $5.4 million. Most of that increase took the form of radio, TV, Google and other mass advertising. The company is now using radio to market its SalesGenie.com product and plans to increase its presence in online media including Google, Yahoo!, MSN and AOL.