Engage Exec Responds to Shakeup

A senior Engage executive sought to shore up partner and customer confidence during a visit to Hong Kong Thursday, and said the company still expected profitability by the end of its fiscal year.

Daniel Jaye, chief technology officer and co-founder of the Andover, Massachusetts-based advertising and marketing solutions company said “We are resetting expectations going forward. We are not counting on a 4Q2000 boom in advertising.” Engage is shifting its focus somewhat to development and sales of advertising, tracking, and content management software, and de-emphasizing direct ad sales.

“We still expect profitability by the end of our fiscal year,” Jaye said, placing a target profitability date at July 31, 2001.

Jaye also commented on Engage’s relationship with Pacific Century CyberWorks (PCCW), saying that PCCW’s use of Engage’s ad technology for Network of the World (NOW) stems from its relationship with Engage parent company, CMGI. However, he also classified the partnership as “co-opetition” because of PCCW’s own ad network, AdSociety, which has moved into narrowband ad sales with an exclusive agreement to use another CMGI company’s technology, that of AdForce.

“We think they have great opportunities in broadband,” Jaye said, adding that those opportunities could extend Engage’s own reach in broadband advertising.

Engage acquired Space Asia on August 31 in an all-stock deal to create Engage Asia/Australia. Last week, the company announced the resignation of its chief executive officer Paul Schaut along with an earnings warning for the first quarter of its fiscal year 2001. Engage terminated 175 positions in September to reduce losses. However, the company has retained all of its Asia staff and has no plans for regional layoffs at present.

–By Steven Schwankert, Managing Editor, asia.internet.com