DoubleClick's Salzman Quits as Head of Global Media
Salzman was unavailable to comment.
Formerly the president of DoubleClick International, Salzman was responsible for the company's global media business, its brand, audience and international networks and its e-mail list services business.
"Barry Salzman has made a personal decision to leave DoubleClick to pursue other opportunities," said David Frankel, DoubleClick's public relations manager. "He will continue to work with us for the foreseeable future as a resource on strategic projects."
Salzman's departure comes amid speculation that DoubleClick plans to exit the media business, which has been a drag on its bottom line. Its media business acts as a sales agency that sells advertising inventory on behalf of third-party Web sites. The unit serves 1,716 online publishers and generated ad revenue of $254 million in 2000, according to analysts. However, they noted that with the downturn in ad spending, DoubleClick's media sales have fallen to less than $90 million so far this year.
Such speculation has been fueled by DoubleClick diversifying away from media and into areas such as technology, e-mail and research. The company recently acquired e-mail marketers FloNetworks and MessageMedia. It also expanded its technology business by buying NetGravity and Sabela and the AdMonitor technology platform from L90. To grow its research business, DoubleClick acquired @Plan and created the Diameter division.
Frankel said the media unit would be managed by Jeffrey Silverman, the company's vice president and general manager for U.S. Media.
Still, DoubleClick has made it no secret that its media business has helped its financial situation little during the past year. In conference calls with analysts, DoubleClick CEO Kevin Ryan has said the company stopped investing in the media unit. It also has been hit hard by work-force reductions.
The company laid off 7 percent of its work force in 2000 and another 10 percent this year, totaling about 350 employees. Many of those cuts were in the media unit.
Analysts said that diversifying away from media is prudent for DoubleClick, given the advertising atmosphere.
"We believe DoubleClick must continue to further diversify its offerings away from publisher products toward advertiser, including ad management and research, to better position the company for the long term," said Safa Rashtchy, an analyst with U.S. Bancorp Piper Jaffray.
When the market recovers, he said, ad dollars will be spent on major portals like Yahoo, AOL, MSN or CNET. These companies maintain in-house ad serving and sales operations.
Lanny Baker, an analyst with Salomon Smith Barney, said in a recent research note to clients that DoubleClick's media unit was too small to be essential to its future growth and that acquiring other, similar businesses and combining them would make sense.
"The media segment's single greatest shortcoming is scale," Baker wrote, "an issue that starts with fragmentation in the online media network field and has been compounded by a soft advertising market. A combination would help."
If DoubleClick got rid of the media unit, he added, it could cut near-term operating losses between half and two-thirds and could reach breakeven six months earlier than expected.
"We believe DoubleClick's valuation would benefit from the removal of an unprofitable and deeply cyclical, people-intensive business unit," Baker said.