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Ziff Davis Reports Q1 Decline, Continuing Game Group Loss

Ziff Davis Media, owner of game magazines Electronic Gaming Monthly and Games For Windows and the 1UP.com game website, has announced its Q1 financials, showing a decline in overall revenue and greater loss, as well as a 44 percent drop in the firm's Game
Ziff Davis Media, owner of game magazines Electronic Gaming Monthly and Games For Windows and the 1UP.com game website, has announced its first quarter financial results for the period ended March 31. These show a decline in overall revenue and an increased loss, as well as a 44 percent drop off in the firm's Game Group compared to the first quarter of 2006. Overall, Ziff Davis had revenues for the first quarter of 2007 totaling $32.7 million. Excluding revenue from closed publications, revenue decreased 12%, or $4.3 million, compared to the prior year. Including closed publications, consolidated revenue was down 19% for the period. Ziff posted an increased loss from current operations of $4.09 million for the quarter, up from $3.67 million in the previous year. The company's digital revenues increased by 9%, as online growth of 26% was partly offset by "the timing of certain custom marketing service programs." Print revenues, excluding closed publications, declined 24%. Looking to the company's Game Group specifically, first quarter revenue amounted to $5.4 million, down $1.1 million or 17 percent compared to the first quarter of 2006 - excluding revenue from the Official U.S. PlayStation Magazine, which was discontinued following its January 2007 issue. Including OPM, revenues were down $4.5 million, or 44%. According to an official statement, the declining revenue was attributed to "a drop in print advertising and circulation revenue for the Group's ongoing publications associated with the console platform transition." The Ziff Game Group has continued to invest in its online properties, however, running 32 percent more online ad campaigns during the three month period versus the prior year, and increasing its average sales per campaign by 36 percent. "I'm pleased to report our fourth consecutive quarter of increased earnings over the prior year," said Robert F. Callahan, Chairman and CEO of Ziff Davis Holdings Inc. "The growth of our digital platforms continues to drive the improved profitability of this business, despite the decline in print advertising. Roughly half of our revenues now come from digital platforms and next quarter we will be well over 50%."

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