Imagex.com CEO Speaks with WhatTheyThink: Profit, PrintBid, iPrint and More
Press release from the issuing company
Lexington, KY - February 7, 2001 - Much has happened in the last couple of weeks at ImageX.com as they reported earnings, closed down PrintBid.com and detailed the performance of their Online Print Center, Extensis Products Group and Extensis’ launch of Preflight Online. WhatTheyThink has spoken with several sources within ImageX.com and those familiar with their strategy.
In a recent release about their financial outlook, CFO Robin Krueger said, “Our intense focus on profitability will continue in our future outlook.” Rich Begert, the company’s CEO reiterated the profit focus to WhatTheyThink yesterday. “We are aggressively cutting our expenses to bring more value to shareholders. As seen in our recent announcements, we will examine every area of our business to quickly achieve profitability without sacrificing our quality services.”
As reported first at WhatTheyThink, one of those decisions was the integration of the PrintBid.com technology into ImageX.com’s solution serving Fortune 1000 customers. One source outside the company familiar with the handling of PrintBid said ImageX.com “rushed PrintBid to revenue before critical glitches were resolved and only fully funded the marketplace in the last quarter.” After being purchased for what was valued at the time at $21 million, (included PaperDeals.com which ImageX.com shut down last year) PrintBid.com remained a free service to buyers and printers for almost a year. In the third quarter of 2000, PrintBid.com began charging a subscription fee to printers. One source within the company said they were able to compile just over 100 printers as paying customers. The site garnered significant traffic reporting over 20,000 user sessions a month. WhatTheyThink interviewed Rick Hawley, then VP of Business Development in November of 2000. He said the volume of jobs going through their technology between June and October 2000 was over $7 million.
ImageX.com closed on the purchase of the Portland based business in December of 1999. ImageX.com’s stock went way up after the announcement of the purchase of PrintBid.com as the dot com craze heated up. The stock price rose over a short period of time from $11 to $33 and then reached around $45 three months later. It is unclear whether the purchase of PrintBid.com was the entire reason for the $120 million increase in value over 90 days. The day after the purchase announcement, ImageX.com joined the Commerce One MarketSite which boosted every company’s stock price that announced a deal with Commerce One at the time.
Mr. Begert said PrintBid just did not meet their expectations in terms of adoption. “It was just too slow. When we purchased PrintBid.com, we knew the technology could be used with our overall corporate offering. That is what we are doing now. We will integrate a powerful solution for our corporate customers with the software.” Mr. Begert said he did not want to give details at this time. We asked how they would integrate PrintBid.com’s product if key people were let go. “We are keeping a few essential employees to help with this process.”
Begert said they are still entertaining options for the customer base. “We will consider any fair offer that moves us forward with our goal of integration.” One source within ImageX.com and another familiar with the negotiations from outside the company said 58k.com looked at the opportunity to take the customer base but an agreement could not be reached. 58k.com is an auction marketplace for printers and print buyers. 58k.com executives were not available for comment at press time.
Mr. Begert said that ImageX.com continues to execute their plan of being the market leader in web based design and print services. “We have many brands including CreativePro, Howard Press and strategic alliances with companies that will push ImageX.com out front. Each business unit contributes to our goal of a total solution.” We asked Begert about the new iPrint strategy which calls for iPrint to compete with ImageX.com. iPrint announced it would transform from a retail online print center to a web based work flow solution provider to large corporations. iPrint powers ImageX.com’s small business print center via a cobranded site. “They are 3 1/2 years late. We have been doing this longer, have technology better suited for large corporate customers and patent pending systems already in place and proven.” Begert said the current relationship with iPrint is a revenue share and contributes very little to the bottom line of ImageX.com.
Cash balances remain strong for the company going further into 2001 and their focus clearly appears to shed businesses and strategies that will not contribute to profit in the near term. Begert has his hands full navigating a public company through uncharted water. As stated in their most recent financial release, “Our continued success is based on our ability to manage operations by focusing on our core business, targeting Fortune 1000 companies and imposing stringent financial discipline on our organization.”
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