Fate of an Ad Giant
- by January 2, 2001
The company said fourth-quarter revenue would be more in the range of $43 million to $45 million, down from the $48 million to $55 million it has estimated in its third-quarter earnings report.
In the conference call, 24/7's CEO David Moore, said he is confident that the online advertising market will grow 50% next year, but that most of the growth will be "back loaded" into the second half of the year.
Meanwhile, the company also said it will cut 100 jobs, bringing the total of positions eliminated since last month to 300. Additionally, CFO Andrew Johns is reportedly leaving the company to spend more time with his family. His position will be filled by Stu Shaw, who has served as senior VP of finance and administration, until a replacement is found.
24/7 is not alone. Earlier this month, DoubleClick lopped 8% to 10% off its fourth quarter revenue forecast said it would lay off an estimated 150 to 170 workers. And, earlier last month, Engage reported fiscal first-quarter earnings below expectations and said it would cut staff, though it didn't say by how much.
But if money earnings aren't enough of a problem for 24.7, the company is also being sued by employees of a recent acquisition.
This week, three employees of Website Results, which 24/7 acquired back in August in a $95 million all-stock deal, filed a suit in Los Angeles Superior Court, holding parent 24/7 responsible for Website Results' allegedly "failing to honor its employment agreements with staff."
Marvin Mitchelson, the Los Angeles attorney best known for his work on celebrity divorce proceedings, is handling the case on behalf of the plaintiffs - Christina Wells and Stephen Simkovich, as well as a former senior technical programmer, Garen Razoian, who the lawsuit said co-developed the technology that made Website Results possible. The suit asks for damages in the "millions."
If the suit is not settled, it will likely go to court within six to nine months.
