Aptimus Lays off 70%

After adjusting Q4 revenues last week, Aptimus today announced that it will cease all activities associated with its consumer-direct web sites to focus on building its direct marketing network, The Aptimus Network.

With this change, Aptimus will discontinue all activities related to its consumer-direct Web sites, including FreeShop.com, Desteo.com, and CatalogSite.com, and expects to transition out of these businesses over the course of the next several months.

The company will be reducing its staff to approximately 60 employees from 210 at the beginning of the year.

According to a statement released by the company, the principal factor in the decision was the belief that the network model is of far greater value to the companys clients and has greater growth and profitability potential than its Web site strategy.

“Our network strategy has shown significant promise since its initial launch last August. During this same period, site-based advertising products such as banners, boxes and newsletters have suffered. For Aptimus, this industry-wide problem has made a strategy that includes our site business difficult to support,” said Tim Choate, president and CEO of Aptimus. “We have thus made the decision to phase out our site business and focus 100 percent of our time, energy and resources on growing the cost-per-action network products desired by our direct marketing clients.”

In addition to layoffs, the company has also significantly reduced other expenses related to its Web site business, including online advertising expenses.

Officials at Aptimus anticipate that these reductions, combined with the staffing changes, will lead the company to have total post-transition core operating costs, excluding fees to network partners related to network revenues, of under $3 million per quarter.

Aptimus has changed its sales strategy from a centralized approach based in Seattle to a decentralized approach focused on large-scale clients with salespeople in major markets, including staff now in place in New York, Atlanta, San Francisco, and Seattle.