From CNet.com:
news.cnet.com
About.com changes tacks, cuts staff
By Reuters
September 27, 2001, 1:25 p.m. PT
NEW YORK--About.com, a network of online directories, has shifted its focus from information toward e-commerce and has cut about 60 jobs in a bid to replace disappearing advertising revenue.
The decision comes as Internet media group Primedia, which bought About.com last year, struggles to offset the deterioration in advertising spending created by the growing economic uncertainty. The company hopes to capitalize on the popularity of researching and buying products on the Web.
About.com spokeswoman Tabatha Sturm confirmed Thursday the company cut more than 20 percent of its work force of about 275 and shifted its focus toward boosting subscription, transaction and e-commerce revenues to supplement advertising.
Several e-mails had been sent this week to About.com's so-called guides, or experts, who work at its network of sites offering information on a variety of topics, outlining the shift toward e-commerce and a decision not to renew 300 of its 750 guides' contracts.
"It makes so much sense to not be so niche-oriented," Sturm said, confirming the decision not to renew some of the guide contracts.
About.com was sold to magazine publisher Primedia in a much-hyped deal that was said to mark the marriage of traditional and new media and was valued at $690 million when it was struck in October 2000. It boasted 700 comprehensive sites offering information from guides on topics that ranged from music to gardening.
In the e-mail to guides, About.com said it expects all of its sites to become resources for making purchasing decisions within the next 12 months and said e-commerce will have an increased presence on all of its sites.
It also said it was in the process of finalizing a deal with a major price-comparison engine.
"What we are looking to do is combine with a kind of (online comparison shopping service) mySimon-type company and have guides do more, such as offer their opinion and recommend products," Sturm said. mySimon is owned by CNET Networks, publisher of News.com.
About.com also said it would ask guides in the fourth quarter to create a holiday gift guide that lists top products and reviews based on their opinions.
"We are trying to expand our revenue streams. We will do more subscriptions-based efforts, create more storefronts to allow small businesses to open up their own businesses within the About.com network using the Web-based service of About.com that we purchased a year and half ago," Sturm said.
The changes come after the departure last week of Chief Executive Scott Kurnit, who sat at the helm of a company that had been characterized last year, prior to the merger, as one of the more promising dot-coms. Kurnit, who will stay on as chairman until the end of the year and continue to be a major shareholder, was replaced by Chief Operating Officer William Day.
Primedia warned Wednesday its 2001 earnings would be lower than expected because of the Sept. 11 attacks on the Pentagon and New York and the soft advertising market. |
