Advertising.com Cuts 25 Percent of Staff

Hour after its larger competitor Engage announced a staff reduction, online ad server Advertising.com said it, too, plans to eliminate a large portion of its workforce.

The company said it will reduce staff by about 25 percent, or 72 positions. Most of those cuts will be from the company’s Baltimore headquarters.

Chief executive Scott Ferber put a good face on the cuts.

“This reduction in our workforce is a proactive step to allow us to continue to develop and deliver industry-leading, performance-based solutions and achieve profitability much sooner than would otherwise be the case,” he said.

As a result of the staff cuts, Advertising.com said it would be refocusing on its core products and services, including its ad serving and marketing technology.

“We continue to be focused on the two things that are most critical to the success of our industry: delivering advertising products to the marketplace that deliver results to advertisers, and delivering these products profitably,” Ferber said.

The company added that the reorganization, along with the $57 million it received from Reuters, America Online, and several venture firms during 2000, put it in what it said is a prime position for 2001.

“We have never been in a stronger market position,” Ferber said. “Above all, our approach is an indication of how our business has matured from its early days as a start-up venture to a market leader today.”

Despite Ferber’s assertion, the move undeniably is something of a backslide for a company that during 2000 touted its being named to Dun and Bradstreet’s list of the fastest-growing Internet ad firms.

But company execs reiterated that the move is less reactionary than in anticipation to the changing market.

“The new economy is unforgiving of those companies that do not anticipate and respond to changing market forces,” said Peter Daboll, Advertising.com president and chief operating officer. “By continuing to practice sound fiscal management, while maintaining appropriate staffing levels and ensuring efficient delivery of our products and services, we intend to grow our market position.”