Kintera Bleeding Signals Business Strategy Shift?

12:00 AM Aug 17, 2005

Kintera finally went public with the gory details, raising their projection of 2005 losses from $0.93-$0.99 per share to $1.15-$1.24 while lowering revenue forecasts from $50-55 million to $42-45 million and pushing projected profitability back from Q1 to Q4 of 2006. If you've got the best part of an hour to kill, you can tune into their shareholder call here, or read all about it here.

What's most interesting on the call, however, is not the litter of statistics only an analyst could love, but the sketch of what looks like a business strategy that would see the Sphere's shadow in e-advocacy significantly reduced.

CFO Richard Davidson, who took over for James Rotherman last week and started laying off staff, pledged to rein in marketing investment "in some areas where we really historically have not had product success." Citing competitive interest, he declined to elaborate the meaning of this phrase, but there's good reason to think that might mean smaller, advocacy-oriented nonprofits. Kintera's ruthless business strategies -- which have included suing nonprofits, patenting business methods and gobbling up software vendors to upsell their client lists -- have not played well in the soft-hearted NGO world. Add the declining price and increasing availability of tools in the sector, and Kintera has the look of a dinosaur among activist-oriented groups. In cases where we at DIA answer formal bid proposals, it's less and less common to see Kintera win the bid, or even among the finalists.

That's not to say there isn't a place for Kintera. They'll even tell you what that place is: Davidson pledged to focus efforts on "education, health [and] faith-based" organizations -- like the University of Virginia, who they inked last week.

Which is good and well, but universities and hospitals are an entirely different animal from Greenpeace or Tikkun -- and ones that are probably more amenable to the other strategies laid out on the call, selling consulting and fastidiously billing client support.

No doubt the pullback will be gradual.  But don't be surprised if the Gold Sponsor line on the program book of your favorite nonprofit tech conference has a different occupant next time around. 

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