NEW YORK, Nov. 19 /PRNewswire-FirstCall/ -- ROO Group, Inc. (BULLETIN BOARD: RGRP) , a global leader in digital media and advertising solutions, today announced results for the third quarter ended September 30, 2007. The Company reported consolidated revenues of $3.4 million for the third quarter, an increase of 54% compared to consolidated revenues of $2.2 million for the third quarter ended September 30, 2006.
During the third quarter, revenues in the Online Digital Media segment were $2.4 million, an increase of 123% compared to revenues of $1.1 million for the third quarter ended September 30, 2006. Revenues in the Advertising Agency segment were $1.0 million for the third quarter, a decrease of 11% compared to revenues of $1.1 million for the third quarter of 2006.
ROO incurred a net operating loss of approximately $8.5 million in the third quarter of 2007, including $1.2 million of non-cash compensation. This compares to a net operating loss of $3.7 million for three months ended September 30, 2006, including $0.6 million of non-cash related items. Net operating loss for the third quarter of 2007 included one-time expenses related to employment termination packages. As of September 30, 2007, the Company had a cash and cash equivalents balance of approximately $16.3 million.
"We offer a robust and complete end-to-end digital media platform which is being utilized globally and anticipate our level of strategic investment to decline moving forward now that the core technology is proven in the marketplace," said Robert Petty, Chairman and CEO of ROO Group.
"During the third quarter, we further sharpened our focus on being a complete digital media services provider through continued strategic investments in our proprietary platform," Mr. Petty continued. "Our core focus has gradually shifted to the global business-to-business market. We have bolstered our platform through the investments made to date and introduced an array of new products and services aimed at expanding the breadth of our revenue generating capabilities."
Mr. Petty explained, "Many of our new products and services have begun to demonstrate traction in the marketplace. An example is our user-generated content (UGC) application which has been successfully deployed on a variety of Web sites including Raven Symone, ABC Radio, and Big Brother. Another example is an important deployment of our e-commerce solution during the quarter, with the live pay-per view online streaming of cricket matches via our Asia partnership with ESPN Star. We also introduced several new advertising solutions during the third quarter including advanced overlays and branded channels."
"Finally, we continue to transition many of our services to automated state, mitigating the costs associated with those services while accelerating our deployment of Web sites," added Mr. Petty. "The number of ROO video players deployed has surpassed 1,000, with 463 currently in the pipeline. Our online digital revenues increased over 100 percent compared to the third quarter of 2006 and we are continuing to talk to a wide range of potential clients about the benefits of our comprehensive services."
SALES AND MARKETING
ROO Media's core focus is to increase global sales of its digital media solutions for enabling video over the Internet. The third quarter saw continued progress on this initiative around the globe. A sample of some of the sites recently activated includes:
-- Europe - Daily Star, Aardman Animations' Wallace and Gromit, Catwalk Queen, Tech Digest, Hippy Shopper, and UK Netguide -- USA - NYPost.com, ABC's America's Country Countdown, Raven Symone, Healthcare.com, Business Profiler, 1clubFM, Intelliverb, and 211 mtvU sites -- Australasia - ESPN Star, XYZ Networks, Ten Digital: Rugby World Cup 2007, Ten Digital: Australian Idol, and News Limited: Gold Coast Bulletin CONTENT SYNDICATION
ROO continued to expand the depth and breadth of the ROO Content Collection in multiple heavy traffic verticals. In the news vertical, ROO became the first international online syndicator of Fox News content and added renowned international news coverage from Agence France-Presse. The Sports Channel was strengthened by the addition of IMG's daily-refreshing SNTV World Sports News Package, a variety of recreational and professional sports content from Total Video and Extreme Video, along with mixed-martial arts videos from The Fight Network. Leading web-original content additions included Digital Trends for technology reviews, Full Turn Media's medical-expert videos, Geo Beats' travel content and 3DD's celebrity biographies. Finally, ROO's growing Business Channel vertical added topical content from The Street.
CORPORATE DEVELOPMENTS -- On November 6, 2007, ROO announced it was selected by HealthCare.com to power health-related video content on its Web site. ROO will bring state-of-the-art online video capabilities and a wide array of medical and healthcare content to the Web site. -- On October 8, 2007, ROO announced a content partnership with GeoBeats, Inc., the premier video guide for international destinations. The partnership significantly strengthens ROO's position in the fast growing, $79 billion online travel industry by expanding its travel channel with compelling international programming. -- On October 2, 2007, ROO announced new content partnership with FOX Television Solutions (FTS), Agence France-Presse (AFP) and Chat the Planet, a provider of Web video covering global issues. The three partnerships bolster ROO's presence in the news vertical and allow the company to offer its customers unparalleled choice in original video news content, including local and regional U.S. news as well as new international programming. -- On September 20, 2007, ROO announced it was selected by The New York Post to launch online video and video advertising on its Web site, NYPost.com. ROO was selected based upon its vast content library, proven technology platform and support of innovative advertising solutions. -- On September 18, 2007, ROO announced a partnership with Shiny Media, the UK's fastest growing new media publisher, to launch three cutting- edge online TV channels featuring technology, fashion, and lifestyle content. -- On August 22, 2007, ROO announced its collaboration with Aardman Animations to re-launch the Wallace and Gromit Web site with advanced video functionality. This collaboration marks the first time that video footage of the British animation series has been made openly available online. About ROO
ROO Group Inc. (BULLETIN BOARD: RGRP) through its 100% subsidiary ROO Media Corporation, is a global service provider enabling businesses to leverage their digital media assets and provide an enhanced user experience. The company's proprietary platform, the ROO Video Exchange, simultaneously services multiple video channels, audience segments and advertisers and, as such, has become a leading platform in content aggregation, distribution and targeted advertising. ROO's unique ability to offer a "many-to-many" service has helped secure its position as the service provider of choice for companies seeking effective strategies for monetizing digital media assets. The company also operates an advertising agency business specializing in a variety of media and services including direct marketing, brand planning and identity, and media buying and packaging. ROO has offices in the United States, United Kingdom, and Australia. For additional information, please visit the Company's Web site at http://www.roo.com/.
