RealTime IT News

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 point."

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 percent" 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.