CMGI Closes Ad-Serving Firm AdForce

Share this content:
Internet incubator CMGI has closed ad-serving firm AdForce after three months of shopping it around and finding no takers.

CMGI said the slowdown in online ad revenue took its toll on AdForce and that it had "exhausted all of its resources."

AdForce, Cupertino, CA, employed about 250 people. Calls to its offices were not returned.

An e-mail sent to Chip Woerner, vice president of marketing, was returned with an out-of-office reply that stated: "As of Monday, June 11, I will no longer be working at AdForce." The reply also included Woerner's personal e-mail address. Messages sent to that address were not returned.

With the demise of AdForce, CMGI now will concentrate on making a success of Engage Inc. and, its remaining online ad service properties. However, CMGI has indicated it will de-emphasize its ad-serving business in favor of more profitable areas of the market.

CMGI may abandon online advertising altogether, according to Safa Raschty, an analyst at U.S. Bancorp Piper Jaffray.

"The overall ad market remains very difficult, and the company [CMGI] indicated that they will continue to de-emphasize the ad-supported models," he said in a recent report. "We expect the company may shift from advertising all together and focus on Engage as a marketing software solution or as part of CMGion."

CMGion is a company that CMGI is creating. It will focus on developing a network-based platform for enhancing the performance of Internet applications and content delivery. The company is not yet open for business.

While the closing of AdForce may not have come as a complete surprise to many in the industry, one of its largest clients, 24/7 Media Inc., said the quickness of CMGI's decision caught it off guard.

In December, 24/7 Media began transferring its U.S. clients to its own ad-serving platform, Connect.

However, 24/7 Media has been shopping around its European operations and hopes to find either an outright buyer or a joint venture partner. The question for 24/7 Media now is whether it should step up its efforts to switch its European divisions to Connect or wait and see whether it can find a partner with its own ad-serving platform.

Tony Plesner, 24/7 Media's chief operating officer, said the company has had a contingency plan for a while to transfer its European operations to Connect.

"We can switch from AdForce to Connect quickly," Plesner said. "We don't think it's an enormous task. It would be foolhardy to wait and see what happens with a third party."

Plesner pointed out that 24/7 Media originally had planned to make the switch from AdForce to Connect within about six weeks. That timetable can be accelerated if necessary, he said.


Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above