New York - 13/04/02: Silicon Alley stalwart DoubleClick narrowed its quarterly loss yesterday, though sales slid 27% amid an ongoing ad-spending recession.

The Internet marketer lost 4 cents a share, matching Wall Street estimates.

But CEO Kevin Ryan remained positive about the future, telling the Daily News that strict cost controls and an end-of-the-year rebound in ad spending will give 6-year-old DoubleClick its first year of operating profits.

"Things have more or less bottomed out," he said in his office at DoubleClick's midtown headquarters. "The bottom line is this year will be so much better than last."

Though overall sales did tumble to $83.7 million from $114 million a year ago, DoubleClick's loss narrowed by 90%.

"The revenue [drop] isn't as bad as it might look on the surface" because the company did sell its European media business, said Lowell Singer, senior analyst at Robertson Stephens.

DoubleClick now makes 60% of its revenues selling advertising and online marketing tools directly to Web publishers such as the Wall Street Journal and Terra Lycos, 22% from direct marketing analysis done primarily for catalogue companies and just 19% from online media sales.

"They have clearly used this time of advertising softness to shift toward higher margin businesses," focusing on software tools for ad management and direct marketing instead of lower-margin ad sales, Singer said. "I think, theoretically, they will reap the benefits when these markets improve and mature."

Ryan explained the sales shortfall, saying "everyone is seeing pressure on the revenue side."

"They're a really smart company," said Marissa Gluck, online advertising analyst at Jupiter Media Metrix. "They've been able to cut costs, diversify products and make very smart acquisitions."

Ryan acquired six competitors at near bargain-basement prices in the last year. And a staff of four ex-investment bankers is always looking for the next market-casualty bargain.

According to Jupiter estimates, online advertising spending — which boosts all of DoubleClicks' businesses — will grow to $6.8 billion this year from $5.7 billion in 2001. By 2006, such spending will hit $15.4 billion.

DoubleClick has posted a net loss every quarter since it went public in February 1998, though it has so far posted operating profits for one quarter in 2000, 2001 and 2002.

Shares of DoubleClick plunged $1.18, or 11%, to $9.98 during regular trading yesterday, recouping 7 cents of its loss after-hours following its earnings release.