• by Masha Geller , May 24, 2001

Sorry to be the bearer the bad news, but it looks like Clear Blue Media, the San-Antonio-based ad network I introduced to you as "the people who answer their phones" two years ago, is closing their doors. The final decision will be reached next week when the board of directors meets, but according to Phil Pennington, the founder of the company, there's a strong possibility that there is no reason for Clear Blue to continue operations past next Thursday.

"It doesn't look like [the ad market] is going to be recovering any time soon, so we're going to cut our losses," he said yesterday in a brief phone interview. There's been a significant decline in total dollars [spent on online ads], but also in total CPMs and that really hurt Clear Blue Media because they outsourced their ad serving, he said. And some predict prices will continue to fall.

Compared to other ad firms that recently went out of business, Clear Blue's losses are not as dramatic - they burned through $1.6 million in total venture capital, which is a relatively low amount. Sadly, Phil said, they were so close to profitability in the last few months that one or two good campaigns could have pulled them through.

"It's difficult to get traditional advertisers to buy something they haven't heard of," Phil said. "They're looking to Yahoo and Excite and AOL, and they're not looking for small publishers from Clear Blue Media."

Additionally, some of their advertisers went out of business without paying their bills, thus Clear Blue was unable to pay their publishers, who in turn refused to run any more ads.

When I asked if they've considered taking the company in a different direction like some others have done, Phil said they've thought about it, researched it, looked into different opportunities of partnering with others, but no one was really interested. It's "natural evolution," he said. "Larger companies are waiting for the smaller companies to die off so they can pick up the pieces. It's good for the players still out there."