Synacor Revenues Dip In Q1

Ad Impressions Drop, But TV Everywhere Opportunities Pick Up
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Synacor, a developer of TV Everywhere and Web portal services, said first quarter revenues dropped amid shrinking search and display advertising revenues.

The company posted revenues of $25.2 million, down from $29.1 million a year ago, while search and display ad revenues reached $19.9 million, off from $24.1 million. Subscription-based revenues were essentially flat -- $5.3 milion, versus $5.1 million in the year-ago period. Synacor also swung to a first quarter net loss of $2.1 million, or 7 cents per share.

Search queries were 154 million in the period, down 27% year-on-year, while ad impressions dropped 25%, to 8.6 billion. Synacor attributed the drop to lower PC browser activity as more usage transfers to smartphones, tablets and other devices.

On the positive end during the quarter, Synacor signed on to help Telus, a Canadian provider with 800,000 TV subs, develop a French and English TV Everywhere platform. Synacor also launched the Suddenlink2GO mobile app, marking what the vendor says is the industry’s first native iOS tablet app that combines functions such as bill pay, service upgrades and access to authenticated TV Everywhere content.

“We expect to launch this functionality to several customers over the remainder of the year,” Synacor CEO Ron Frankel said.

During Tuesday’s earnings call, Frankel also talked up the potential of the company’s app ecosystem for next-gen browser start pages and its Android home-screen framework that uses Synacor’s app management platform.

Utilizing this system, both we and our customers can promote apps and drive sampling and usage of apps,” he said. “We believe this is a very large business opportunity with great implications for both our current customer base and new customer segment such as Wi-Fi providers, hotels, and other verticals. Toshiba, he said, is the first customer to launch Synacor’s next-gen, multi-screen startpages, which will enable the CE giant to deliver Web-based news and other info via a curated set of apps.

In March, Synacor announced that Frankel will step down as president and CEO. Frankel, who plans to stay on as an advisor, said Synacor had hired Mitchell James out of New York to conduct the search for a successor and that the process is proceeding, but had nothing else new to report on that front.

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