IAR Bits and Bytes

Digitas Digs In

To further control costs, Boston Internet consultant Digitas recently laid off 20 percent of its staff and closed its Hong Kong office.

The cuts were announced as part of its third quarter earnings report. Digitas said the stumbling economy, made worse by the Sept. 11 attacks, was to blame for the disappointing results.

The firm posted a pro forma cash loss (excluding a $25 million restructuring charge) of $6.8 million, or 10 cents per share, compared to a profit of $5.3 million, or 7 cents per share, for the same period a year ago. Analysts surveyed by Thomson First Call predicted an 8 cent per share loss.

Revenues sank to $51 million vs. $75.5 million in the third quarter of 2000.

“Although some of the challenges of the third quarter were without precedent, we achieved several important milestones,” said David Kenny, Digitas’ chairman and CEO.

Those included: improving the company’s cash balance to $38 million from $33 million last quarter; diversifying its client base by picking up Bayer Pharmaceuticals, and other non-Internet accounts; and developing partnerships with Microsoft and IBM that could lead to new business.

The job and real estate cuts are expected to save Digitas $15 million this year and $60 million in subsequent years. Earlier this year, a restructuring cut $45 million of Digitas’ costs.

“We have a strong balance sheet with virtually no debt,” said Jeff Cote, Digitas’ CFO. “We have always been conservative in our fiscal management, and we are committed to being a cash-flow positive enterprise.”

Digitas’ result were announced after markets closed. Earlier, the stock surged 0.61, or 42 percent, to 2.08. In the last 52 weeks, the issue has ranged from 0.88 to 17.688.

Asiacontent.com Closes Units, Will Focus on Joint Ventures

Asian Web site network and interactive services company Asiacontent.com said it would spin off its interactive services units in Korea and Taiwan, and shut down similar operations in Singapore, Hong Kong and China.

As a result, the Hong Kong-based firm said it would focus on its operation of DoubleClick Media Asia and MTV Asia Online — joint ventures with ad network DoubleClick and Viacom’s MTV Networks.

The moves are part of an effort to reach profitability, and could also include layoffs at the two divisions. So far, the efforts reduce headcount from 278 to 104, and cut more than $500,000 from monthly operating costs.

“We expect to realize significant reduced operating expenses as a result of the actions taken,” said chief executive Chris Justice. “We see the current tough operating environment for online advertising and resulting consolidation amongst competitors as an opportunity to increase our share of Internet advertising and marketing dollars.”

In Taiwan, Asiacontent said it had agreed to sell its Internet Solutions unit to a new company headed by Michael Wu, the unit’s general manager. Similarly, Asiacontent.com’s Korean office would be spun off to a management team led by Bryan Lee, who is country manager for Asiacontent.com in Korea.

Asiacontent.com will retain an equity interest of less than 20 percent in the Taiwan and Korea spin-offs.

MAPS Settles Experian/Exactis Suit

Anti-spam group Mail Abuse Prevention System has reached another settlement with a longtime foe, email marketing Exactis.

Through the settlement with Denver-based Exactis — now called Experian eMarketing after the unit had been sold by 24/7 Media to database marketer Experian — MAPS agreed to remove the firm’s email servers from its Realtime Blackhole List.

The RBL is a database of reported spammers’ mail servers, used by many ISPs to filter out unwanted and burdensome email.

The disagreement stemmed from Redwood City, Calif.-based MAPS decision to add Exactis to the RBL in November of last year, alleging that spammers were using the servers to send unwanted email.

Shortly thereafter, Exactis sued the non-profit and obtained a temporary restraining order from the U.S. District Court in Colorado.

Not only is Exactis off the hook with MAPS, the settlement agreement also stipulates that MAPS is prohibited from listing Experian eMarketing again without first obtaining a court order.

In addition, neither Experian eMarketing nor its clients will be required to use double-opt-in, which MAPS had demanded in November. Should MAPS breach the settlement agreement, it will likely face “significant” penalties, though the companies did not disclose details.

“We are very pleased with the settlement agreement and believe it reflects the validation of Experian’s email marketing standards and that we remain at the forefront of consumer privacy and protection,” said Tom Detmer, who is president and general manager of Experian eMarketing Services. “This settlement confirms that the privacy practices we have in place are responsible, accountable and in the best interests of the public and the marketplace. We will continue to offer the double opt-in solution for those clients who determine it is the right permissioning practice for their business.”

Meanwhile, Experian has committed to requiring its clients to provide them with lists that contain only opt-in email addresses.

“The settlement is the result of months of intense negotiations”, said Mitchell. “Both sides had to compromise quite a bit to reach this settlement. Even though they haven’t gone as far as insisting that their clients use fully-verified opt-in … they have made several changes to ensure that only those who want to receive their email receive it, and to respond to concerns from those who don’t.”

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