Perion to lay off dozens of employees

Perion

The risks and changes in the Internet search market have had a negative impact on Perion Network's business.

Perion Network Ltd. (Nasdaq:PERI: TASE:PERI), which develops distribution and monetization software and services for developers of software and applications, cut its annual forecasts during this past summer. The revision was due to the change in Google's policy involving its Chrome browser. Google has toughened its policy by making it more difficult to download and install add-ons made by other parties, including tool bars and programs supplied by Perion. The company now forecasts an $80-90 million net profit on revenue of $380-400 million.

The risks and changes in the Internet search market have had a negative impact on Perion's business, and have led the company to institute cost cutting and refocusing measures. Simultaneously with the release of its third quarter financial statements, Perion is expected to report a new strategic plan focusing on the mobile market, at the expense of the web search market. The company will reduce its estimated 450-500 workforce by laying off dozens of employees.

Perion, managed by CEO Josef Mandelbaum, trades at a market cap of $367 million, following a 56% slide in its share price this year. The company recently raised NIS 140 million in a bond issue on the Tel Aviv Stock Exchange (TASE) (before lowering its forecasts, the company planned a NIS 350 million issue, and even the offering it eventually made raised less than the company expected).

Perion will soon launch a new product for the mobile market, but will probably be in no hurry to liquidate its traditional search business, in which it signed a three-year contract with Microsoft, which operates the Bing search engine, only a few months ago.

Perion, originally an e-mail applications company called IncrediMail, in recent quarters completed its merger with the Conduit's ClientConnect tool bars division. As part of the merger, announced a year ago, 81% of Perion's shares were allocated to Conduit's shareholders, giving the merged company a value of over $900 million, the majority of which has since vanished. Several months ago, Perion acquired US company Grow Mobile, which provides a platform for mobile phone advertising, in a deal likely to amount to $42 million.

Published by Globes [online], Israel business news - www.globes-online.com - on October 29, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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