This is the European article I referred to earlier:
Matty Gregg
"I've only learned two things in life. I know that the night must end, and that the sun will rise."
Copyright 1998 Centaur Communications Ltd.
New Media Age
March 5, 1998
SECTION: News; Pg. 1
LENGTH: 868 words
HEADLINE: Empty offices dawn on Zulu Tek as Softbank staff walk
BODY:
A war of words has broken out between Zulu-Tek, the investment
company
which bought out Softbank Interactive Marketing (SIM) last December, and
its
former European employees who walked out en-mass last Friday to form the
new Web
sales network InterAd.
Telia, which operates the Alta Vista search engine in Europe, has
confirmed
that on Friday last week it terminated its contract with SIM although it
still
had six months to run. It's believed this single contract formed 60-70%
of
SIM's
business.
New Media Age, March 5, 1998
Gordon Simpson, formerly managing director of SIM Europe, said this
was a
contributing reason for his decision to leave and form InterAd with the
former
director of SIM Southern Europe, Xavier Jane, on Monday this week.
Four other staff have joined InterAd so far, and the rest of SIM's
14
European staff look likely to join by the end of the week following the
mass
resignation. He will now be InterAd's chief executive officer, while
Jane
takes
the post of chief operating officer.
Sources allege that aside from Telia's departure, work being done on
existing accounts with SIM was being "undone elsewhere". One observer
alleges
that at least two of SIM's clients, including Cric Info and Carling Net,
had
recently begun looking for different representation.
Simpson said: "This will be the first wholly owned European Ad-sales
house.
We will be considering venture capital offers of funding. The team
coming to
InterAd enjoys an excellent reputation. We feel this will be a very
exciting
proposition for the European market."
He said InterAd would be adopting the DoubleClick ad-network model,
combined
with a large sales force. He denied that the market may become crowded
with ad
sales houses and said InterAd would concentrate on providing the best
user
New Media Age, March 5, 1998
profiling solution available.
Global representation for its European sites will be provided
through
reciprocal affiliate agreements in the US and Australia.
Simpson said a proposal to Zulu-Tek to reorganise SIM Europe's
operation
had been rejected, following the failed MBO late last year by founder
Andy
Batkin, who subsequently departed.
"We subsequently worked with the new owners, but events demonstrated
that
this wasn't the best option." He said he was aware of the reasons for
Telia's
decision to pull out, but declined to comment further. However, sources
say
InterAd has been in discussions with Telia about taking over the Alta
Vista
contract.
Simpson said that last year the European ad market was worth an
estimated $
50m. He said predictions put the size of the ad-market in Europe at $
120m
-180m
this year.
InterAd Holdings will be the holding company for InterAd's European
operations, initially in the UK, France Germany and Spain. A deal with
an
unnamed European technology partner to provide the ad-serving technology
is
New Media Age, March 5, 1998
being hammered out this week.
The Rhode Island-based Zulu-Tek (formerly known as NetMaster and
now
believed to be in the process of changing its name to Zulu-Media) issued
a
statement on Tuesday claiming that it had been its intention not to
renew
any of
SIM Europe's client Web sites, with a view to winding down the European
operation.
Neil Miller, the remaining representative for SIM Europe, said: "The
interactive advertising product market is where it's at now. Our
interactive
banner technology, Sesame, can't be received in Europe because the
bandwidth
isn't there yet, so there was no need to keep pouring money into the
European
operation. The walk-out by staff has nothing to do with this decision.
There is
a much greater margin to be made in the interactive advertising
technology
market in the US." Zulu-Tek's subsidiary, EchoMedia, markets a plug-in
for
browsers which 'plays' moving content inside banner advertising
(www.echomedia.com).
He claims staff were aware "since Christmas" of Zulu-Tek's
intentions
not
to renew client contracts, and denied that Telia terminated the
contract.
"Telia
wanted to renew the contract, but we took the decision not to renew," he
said.
"None of SIM's client sites have had their contracts renewed. We wanted
to
New Media Age, March 5, 1998
withdraw from this market."
Miller also confirmed that SIM Europe was one of a "number of
businesses" he
has an interest in, including ownership of the Mad Dog Cafe in London's
West
End. Earlier this week, Wired News carried reports that Zulu-Tek
backer
Pattinson Hayton, an Australian financier behind the Softbank
Interactive
buyout, has previously run into trouble with securities regulators in
the
US and
the UK.
Paul Simon, managing director of Web sales house TSMSi commented:
"This
confirms how volatile the sales side of new media can be. Also, it's
clear
that
critical mass matters. Only sales houses with a number large, well
-branded
client sites, not just one, which give real value back to clients will
survive."
Josh Rosen, vp of marketing Real Media UK, said: "We're taking
InterAd's
launch as a clear sign the market is growing."
www.interadsales.net
Fancy a chat?
New Media Age, March 5, 1998
Log in for a chat with Andrew Swift, head of new media at
recruitment
consultants Price Jamieson this Friday (6/3/98) at 4pm. Brought to you
by
AdWeb
and New Media Age
www.nma.co.uk
LANGUAGE: English
LOAD-DATE: March 5, 1998 |
