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CMGI (Nasdaq: CMGI) was at US$4.13, down 19 cents, in Friday morning trading after the Internet incubator said directors "reconfirmed its support" for venture capital affiliate @Ventures.
The statement was issued after a report in the San Jose Mercury News said @Ventures has run out of cash and is no longer able to fund the companies in its portfolio. The report said CMGI is cutting back on its support for @Ventures as part of its plans to cut cash.
"As announced last fall, CMGI is continuing with its corporate restructuring focused on growth, profitability and leadership across all our business segments, including @Ventures," said David Wetherell, chairman and chief executive officer of Andover, Massachusetts-based CMGI.
"Throughout this restructuring period, CMGI has been working aggressively to achieve greater focus and clarity into our larger business goals, as well as our cash position," Wetherell said. "Over the last several months, and following a number of major restructuring efforts, the CMGI board has resolved to renew its commitment to @Ventures."
Wetherell added: "We expect to continue making follow-on investments in existing portfolio companies successfully executing on their business plans, as well as a select number of new investments which represent promising opportunities for CMGI."
CMGI said @Ventures will focus fewer new investments, primarily in the wireless industry, Web-based distributed storage industry and natural-language processing technologies.
CMGI said it will further detail its plans for @Ventures on Tuesday, when
CMGI reports results for the second fiscal quarter. CMGI previously
predicted revenue of $335 million to $345 million for the quarter, which
ended in January.
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