which has been in financial turmoil lately, is dropping the ax on one of its properties, interactive marketing firm MatchLogic.
The Redwood City, Calif.-based broadband Internet service provider said Tuesday that it would close the Westminster, Colo.-based subsidiary by the end of the year.
The closing comes as a unhappy conclusion to one of Web marketing’s most respected and longest-lived players. Founded in 1996 amid growing interest in Internet advertising, MatchLogic soon became one of the first industry players to offer Web advertising, database marketing and e-mail marketing under one roof. Two years later, Excite acquired the firm for around $89 million in stock.
In other cost-cutting moves, [email protected] also said that it would be paring down its Excite.com portal, removing services and features to concentrate on areas most popular with its users. The company provided few details of its portal restructuring plan, but issued a statement saying that Excite.com would “continue to provide core applications and content.” (As a service focused on broadband users, the firm’s @Home 2000 content portal was not touched in this latest round of restructuring,)
Between the closing of MatchLogic and the changes at Excite.com, the company said it would shed about 500 positions by year’s end.
While unfortunate, the news has been long expected, since [email protected] has been saying for months that it aims to lessen its exposure to the troubled online ad market by exiting most of its media businesses. In February, the company spun off its rich media ad unit, Enliven, which it had also originally purchased in 1998. Last week, it sold e-card site BlueMountain.com to American Greetings for $35 million in cash.
“Selling and reducing our narrowband media assets that do not contribute financially or strategically to the broadband access business is the right direction for our corporate viability,” said [email protected] chairman and chief executive Patti Hart.
Yet in spite of the recent restructuring moves, [email protected] confirmed that the firm still might not have enough capital to make it to profitability. As of June, the company had about $183.4 million in cash and marketable securities, a roughly $104 million quarterly burn rate, and around $1 billion in debt, portions of which are coming due.
As a result, the firm said that it continues to explore options with respect to its cash needs and capital structure, but provided little further detail.