• by November 21, 2000

As we reported in yesterday's MediaDailyNews, six-month-old company AdExchange is in serious trouble. The company touted its service as being the only one that linked buyers directly to inventory posted by media companies, but apparently the intended users didn't quite buy into the concept.

Now, according to one source, they've gone out of business altogether and company founders are planning to go into business as an ASP solution using the technology created for AdExchange. According to another source, they're down to a dozen employees and are in discussions with investors about how to proceed. Either way, things aren't running smoothly.

Is this an indication of online ad exchanges dying out? Were the skeptics right when they said ad media can not be bought and sold via the Internet? Not necessarily. Surprisingly enough, AdOutlet today announced it transacted $1.5 million of political advertising inventory across its platform during the month of October.

But there's more bad news expected industry-wide.

Reportedly, after a November 8 announcement of disappointing earnings and intentions to cut 200 jobs, 24/7 Media on Monday eliminated a number of employees as well, including several top executives. Apparently, some of the company's most senior management fell victim to the layoffs, with the sales operation especially hard hit. Sources said that 65 employees in the company's New York headquarters were laid off, and some offices were closed down altogether.

At the same time, online ad spending figures keep going up, so the industry is by no means doomed. But the scenario still begs the question (and I hope you answer) - Where and how are you spending your media dollars?