Adero On The Ropes

Adero Inc., a Waltham, Mass., startup that has struggled to create a Web content delivery network to rival Akamai’s, has
denied rumors that its closure is imminent while acknowledging it needs investor cash soon to stay alive.

“The board has not voted to shut down,” said spokeswoman Nancy Davis, saying her office has been flooded with such rumors. “But the reality is we’re aggressively
seeking funding, and I’m not sure how long we can sustain the business without it.”

Asked when the company’s cash will run out, Davis said, “I would love to know that myself. But I don’t think the company would share that information at this

It’s been a fast ride down for Adero, which just seven months ago closed on $72 million in venture funding and announced participation in Content Bridge, a high-profile bid to change the way Web content is
delivered to users.

Rather than build a separate server network to speed the path of data from Web firms to desktops, as Akamai and Digital Island
have done, Adero aimed to partner with Inktomi to ship data through servers of Internet service
providers like AOL , another Content Bridge partner.

But in December, just four months later, Adero acknowledged laying off “at least 10
of its 260 workers.

A few weeks later, it sold its Content Bridge stake to Inktomi for $23.5 million,
saying it would use that cash to start building a separate server network again — this time aimed at ISPs and telecom carriers in foreign markets.

So far it has signed deals with two telecom networks in small international markets, Sunrise Communications of Switzerland and Telecom Malaysia, the southeast
Asian nation’s largest carrier.

Davis said the company expects to make a “major customer announcement in the next couple of weeks. There’s a lot of good business out there and a lot of
momentum, but we need to keep our funding in order to keep that momentum going.”

Adero could find itself one of dozens of Net startups that were counting on additional venture financing and found themselves bereft when the investment climate,
spurred by the bear Nasdaq, froze.

Davis said the company has laid off no more employees but said attrition has brought the number down to about 120. An unspecified number transferred to Inktomi
when Adero sold its Content Bridge stake.

Davis said employees were trying to maintain a “business as usual state. People here are certainly concerned, but with the economy in such a volatile state, people
are not so quick to make a move” to leave.

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