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DoubleClick cutting jobs
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March 21, 2001: 1:22 p.m. ET
Online advertising services company also overhauls offerings
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NEW YORK (CNNfn) - DoubleClick said Wednesday it would cut its work force by 10 percent and overhaul its media business in a bid to boost its online advertising services.
The leader in online ad services, hit hard along with other companies by the steep decline in Internet advertising, said it expects to end the second quarter of 2001 with 1,850 employees. It gave no specific number of jobs to be cut.
In addition to the layoffs, DoubleClick said it is making "fundamental changes" to the way it is approaching its media business, from which the bulk of the job cuts will be made.
The New York City-based company said it is creating two separate networks to handle its U.S. media business: one focusing on branded Web sites, and the other centered on audience reach and targeting of ads.
"Given today's market conditions, we have determined that this strategy is the best way to service our Web publishers as well as advertiser clients," Barry Salzman, president of DoubleClick's media business, said in a statement. "Our goal in this realignment is to leverage our media sales force more efficiently as well as improve client service levels with a dedicated senior level team focused on key sites and advertisers." 
The move reflects DoubleClick's attempt to increase profitability and to focus more on its data and technology businesses, analysts said.
DoubleClick provides targeted Internet ad serving for more than 1,500 Web sites using its proprietary technology, which collects and analyzes audience behavior. Using this information, DoubleClick predicts which ads will be most effective, measures ad effectiveness, and provides data for Web publishers and advertisers.
In addition, the firm sells ad space across a network of sites, including AltaVista, Travelocity, and Egghead.com.
As have most ad companies, DoubleClick has been hurt by a sharp slowdown in the advertising market. However, the impact on DoubleClick was exacerbated by the collapse of scores of dot.com companies over the past year, many of which had poured money into advertising in order to raise their profiles.
"It's not tremendously surprising in that the media business has been a drag on their profitability," said Dana Serman, analyst at Lazard Freres. "It's the only part of their business which loses money."
In January, DoubleClick said its first quarter media revenue -- from selling advertising on the Internet -- would be down 30 percent to 35 percent, leading to a first quarter loss of between seven cents and nine cents per share.
Shares of DoubleClick (DCLK: Research, Estimates) slipped 19 cents to $10.75 in Wednesday afternoon trading. They have fallen nearly 91 percent from a 12-month high of $119.
-- from staff and wire reports 
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