• by Masha Geller , August 20, 2001

Two weeks ago, Engage, Inc., one of the leading online ad networks, warned investors that its parent CMGI would not be renewing its $50 million loan to the division. At the time, Engage president and CEO Tony Nuzzo said Engage would be forced to undertake more cost-cutting, and was "aggressively considering a range of strategic alternatives."

It didn’t take long for all those shocked by the announcement to see just what Nuzzo meant by “aggressively.”

Today, Engage announced that it would further reduce its workforce and that is has entered into discussions with potential buyers for its media business - its ad network of websites, its AdKnowledge research unit, its ad optimization and targeting service, and its Engage Knowledge profiling service.

Engage said it would immediately streamline the media business by eliminating approximately 100 media-related jobs. In addition, another approximately 125 media-related employees are being notified that their positions will be eliminated if no sale is consummated.

"Given the continued dramatic downturn in the advertising industry, Engage cannot sustain this media business at the expense of the far more promising software business," Nuzzo said in an official announcement. "We believe today's decisive action will help us unlock the potential of Engage's software business and establish a singular focus on the high growth opportunities we have identified."

Engage offers a range of software solutions designed to help marketers, publishers, and advertising agencies manage marketing content across traditional and new media channels. By using these solutions, Engage's customers are able to deliver consistent messages across channels while streamlining production processes and increasing efficiencies. Among its industry leading software products are Content Server, Approval Server, PromoManager and AdManager.

As part of today's cutbacks, Engage also announced that it would discontinue its Engage Knowledge profiling service. In keeping with its longstanding privacy commitments, Engage said it does not intend to sell the service's database of anonymous profiles.

Company officials said they would provide additional details and financial guidance concerning the realigned company as part of its fourth quarter financial announcement in mid-September.