Web.com Reports First Quarter 2007 Results

May 4, 2007; 05:55 AM
ATLANTA, GA -- Web.com, Inc. (NASDAQ: WWWW), a leading destination for websites and web services, has reported results for its first quarter ended March 31, 2007.

Summary of First Quarter 2007 Results:

• Total revenues for the quarter were $13.0 million, up from $12.3 million in the year-ago quarter.   
• Net income for the quarter was $1.8 million, or $0.11 per share, versus a loss of $5.5 million, or $(0.34) per share, in the year-ago quarter, pending final tax treatment. The change in net income year over year includes a $3.4 million gain in discontinued operations and tax benefits, pending final tax treatment.
• Adjusted net income from continuing operations (1) was negative $0.2 million, versus $0.1 million in the year-ago quarter.   
• Net subscribers totaled a record 158,000 at March 31, 2007. Gross organic subscribers totaled a record 20,000 for the quarter, up approximately 6,000 gross subscribers, or 44%, from March 31, 2006.
  

“The first quarter marked significant improvement,” stated Jeff Stibel, President and CEO, Web.com.  “Compared to the fourth quarter of 2006, revenues were up, both gross and net subscribers were up, net income and adjusted net income improved and average revenue per user (ARPU) was up.  In aggregate, we had an excellent quarter and continued to execute on our business model and strategy.”

The first quarter’s net income was driven both by a favorable legal settlement and the positive early results of process and migration improvements.  As a result of these process and migration improvements, in the first quarter the company has already saved approximately $1.5 million annualized.  The company now expects annual savings in excess of $5.0 million as a result of these improvements which will be implemented over the next twelve months.

“We continue to streamline operations by eliminating less profitable systems and replacing them with a more profitable unified platform,” stated Gonzalo Troncoso, Executive Vice President and Chief Financial Officer.  “Coupled with our revenue growth and an estimated annualized savings rate of approximately $5.0 million for these consolidation efforts, we continue to feel that the company is well-positioned for long term profitability.”

The financial statements included in this press release are subject to further review of the accounting treatment for the tax benefit associated with our gain on discontinued operations. The final determination of tax treatment will be reflected in our Form 10-Q which will be released on or before May 10, 2007.

About Web.com

Web.com, Inc. (NASDAQ: WWWW) is a leading destination for the simplest, yet most powerful solutions for websites and web services.  Web.com offers do-it-yourself and professional website building, website hosting, ecommerce, web marketing, professional website design and e-mail.  Since 1995, Web.com has been helping individuals and small businesses leverage the power of the Internet to build a web presence. More than 4 million websites have been built using Web.com’s proprietary tools, services and patented technology.  The company’s web hosting and website building services can also be found under the Interland (www.interland.com) and Trellix (www.trellix.com) brands. For more information on the company, please visit www.web.com or call at 1-800-WEB-HOST.