Engage to Sell Media Unit, Cuts 100 More Jobs
Mark Horan, an Engage spokesman, declined to identify the possible buyer for the media unit.
In the third quarter, Engage's media revenue fell to $12.8 million from $19.8 million in the second quarter. Software and services revenue rose to $12.6 million from $8.3 million in the second quarter.
As part of its restructuring, Engage said it reduced its head count since November by more than 50 percent. With the elimination of the additional 100 workers, all of whom worked for the company's media unit, Engage now has about 400 employees. The company also said that an additional 125 workers in its media unit have been notified that their jobs are in jeopardy if the company does not find a buyer for the unit.
"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," Engage CEO Tony Nuzzo said.
Engage also said it will discontinue its Engage Knowledge profiling service. The company noted that it did not intend to sell its database of anonymous profiles.
The company expects to post lower revenue in its fiscal fourth quarter than previously announced because of the soft advertising market. The company's fourth quarter ended July 31. It expects to report results in mid-September.
To make matters worse, Engage said CMGI Inc., its parent, has not extended its $50 million conditional financing commitment to the company beyond July 31. However, CMGI did say it was willing to discuss continued financing.