Interwoven Inches Toward Profitability

Content-management vendor Interwoven Inc. is hoping its new focus on Web services, and the collaboration technologies it gained through its August acquisition of iManage Inc., will one day lead to profitability. In the meantime, it will have to settle with inching toward that goal.

Write-offs continue to undermine the company's financial performance, but pro forma numbers indicate that Interwoven will be closer to profitability once it sheds onetime charges. For the third quarter ended Sept. 30, Interwoven posted a loss of $18.8 million on revenue of $26.1 million, compared with a loss of $86.6 million on revenue of $30.0 million a year earlier. Onetime restructuring charges of $13.3 million contributed to the most recent loss, while the year-ago numbers were skewed by $76.4 million in goodwill charges related to earlier acquisitions. On a pro forma basis, the company lost $4.4 million during the most recent quarter, compared with $7.7 million a year earlier.

During a conference call with analysts, CEO Martin Brauns said Interwoven should enjoy significant momentum once the fruits of the $171 million acquisition of iManage and its Web services strategy begin to take hold. Interwoven has reinvented its content-management architecture by offering more than 170 Web-services components that companies can use to build content-driven applications. The company plans to integrate iManage's collaborative document-management tools to create a content-life-cycle infrastructure. "Customers are very impressed with the vision we've created here," Brauns said. The iManage acquisition is expected to close next month.

In an interview with InformationWeek, Brauns said he believes EMC Corp.'s recent $1.7 billion acquisition of Documentum Inc. would help rather than hurt his company. "How lucky can you get, having your biggest competitor plucked from the market?" he said, adding that Documentum has "become captive to a hardware systems vendor."