A number of management missteps cost Utah’s Overstock.com dearly in 2011, the online discount retailer acknowledges.
The Salt Lake City-based company said revenue for its 2011 fiscal year declined to $1.05 billion, a drop of 3 percent from the previous year’s revenue of $1.09 billion.
That resulted in the company posting a loss for the year of $19.4 million, or 84 cents, compared with the previous year’s profit of $13.9 million, or 59 cents per share.
Overstock.com said it revenues were adversely impacted during the first and second quarters of 2011 due to sanctions placed on it after Google discovered the company was padding search engine results so its name would appear higher up on the list of product suppliers than it deserved.
“We made changes to conform to Google’s guidelines and on April 21, 2011 Google ended its penalization of our natural search results,” the company stated.
Overstock.com also indicated its revenues were hurt by a shift of marketing resources away from coupons and other site-wide promotions into its Club O loyalty program, which was less effective in generating sales during the second and third quarter of 2011.
“We also believe that our efforts to rebrand ourselves from Overstock.com to O.co hurt revenue growth in 2011 as it confused some prospective customers who had trouble finding our website,” the company said.
Revenue for the fourth quarter of 2011 fell to $314.1 million, a 10 percent decrease from the revenue of $348.9 million recorded in the same period a year earlier.
The company also posted a fourth quarter loss of $3.4 million compared to the net income of $14.9 million recorded in the final quarter of its 2010 fiscal year.