Once-hot Sausage snags on fading revenues

Market realities are beginning to descend on young New Zealander Steve Outtrim and his company, Sausage Software. The company's shares, which were riding at $A1 after its public float last October, last week crashed to 26 cents at the news that an expected annual operating loss of $A100,000 in the first year had blown out to $A2.8 million.

A few months is a long time in this industry where today’s technical leader can soon become tomorrow’s also-ran.

Young New Zealand innovator Steve Outtrim was probably over the moon when Sausage Software’s public float last October in Australia saw the shares reach $A1.50 after listing at 75 cents, then settle back to $A1.

That made Outtrim’s personal worth $A90 million, though he couldn’t trade his stake for two years because of stock exchange rules. “I’ll just have to get by on a $200,000 salary and company Porsche,” he quipped at the time.

His world was rosy. Sausage Software’s HotDog HTML editor was the number one rave in the Internet world.

Last week Outtrim spent his 24th birthday trying to put his company back on track. The shares had crashed to just 26 cents after Outtrim had announced the expected annual operating loss of $A100,000 in the first year had blown out to $A2.8 million. Below-par revenues were cited as the reason. Staff would be cut by more than a third and Sausage was shifting its focus to electronic commerce.

“There was a lot of euphoria associated with Sausage but they’ve yet to prove the goods beyond one product,” one technology analyst said. He might also have pointed to the much broader number of functional, competing products now available.

Sausage expects to offer its first electronic commerce product, code-named Shopping Cart, in the next few weeks. It will be bundled with the recently released HotDog Express Web authoring tool to provide vendors with a low-cost way of securing email orders.

A US subsidiary, named eVend, has been established to market electronic commerce products and handle credit-card transactions.

Outtrim says Sausage will focus on North America, which accounts for 75% of its business, and Asia.

The jury is out. Sausage may have run into more than a minor snag.

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