Rival Networks Closes Ad Sales Offices; 12 Laid Off

Seattle-based Rival Networks, which runs the Rivals.com network of

sports channels, has shut down ad sales offices in New York, Chicago,

San Francisco and Los Angeles, laying off 12 employees in the process.

Rivals Network said it would outsource its advertising sales to

Phase2Media, the Silicon Alley advertising and marketing shop known for

its hands-on approach to individual site representation. Financial

details of the deal were not released.

Rival Networks said the decision to shutter the four regional

ad sales offices was based on economics. “[Our partnership] with

Phase2Media enables us to better serve the growing needs of our

advertisers while maximizing the financial success of our company,”

said Saul Gamoran, chief executive officer of Rival Networks.

“With our recent $10 million funding round, we are in a strong position

to meet our long term objectives. We are taking strategic steps to

maximize our resources and work as efficiently as possible to meet

those goals,” he added.

The move to outsource ad sales after having established an internal

sales force may be a harbinger of things to come in the Internet

advertising industry. As Internet publishers’ growth curves were

heading steadily upward, industry-watchers questioned whether rep firms

like Phase2Media, DoubleClick and 24/7 Media might lose clients as

publishers brought sales in-house. Now, the tide may be turning in the

other direction, as ad dollars dip and publishers seek to focus on their core

competencies.

Phase2Media has already made inroads in the sports content space,

counting clients such as the Olympic Committee and the National Hockey

League (NHL) as clients for Internet ad sales. Other clients include

the Elle Interactive Network and Maxim Magazine Online.

Rivals.com is funded by VC firm Hummer Winblad Venture Partners, Intel

Corporation, News Corp.s News Digital Media, The Phoenix Partners and

Softbank Capital Partners. Its network consists of more than 500

sports-related team and channels.