Phase2Media Sees Sizable Restructuring

Alley-based ad representation firm Phase2Media is making drastic changes in its internal organization, modifications that could point to a closing or serious ramping down of its sales efforts.

Insiders say the company has made drastic staff cuts throughout its businesses, affecting both regional offices and its headquarters.

A source at the company, speaking on condition of anonymity, confirmed a “major restructuring.” The source did not rule out a complete shutting down of the business.

Chief executive Richy Glassberg and chief financial officer Rich Nachmias did not return calls.

If the news is correct, then Phase2 is the second major Web advertising player to shutter its doors this month. Earlier, Internet holding company CMGI said it would be closing its ad serving firm AdForce, for which it was unable to find a buyer.

As with the AdForce closing, should Phase2Media shut down, major players stand to benefit from picking up orphaned clients, which in Phase2’s case includes Maxim Online, Prodigy Communications and all of the online properties belonging to magazine publisher Hachette Filipacchi, a major investor in the firm.

Indeed, sources at the major ad rep firms tell internetnews.com that they are already in talks with former clients of Phase2Media, which has made a practice of representing only well-known Web site brands.

While big-name clients going on the market could be a boon to remaining players in the field, it’s clearly a loss that will resonate throughout the industry.

Glassberg, for one, is a well-known figure in the online advertising world, having not only founded a widely respected Web ad rep firm, but also having served as the outspoken vice chairman of the Interactive Advertising Bureau, during a time when the trade association took on new roles in its capacity as an industry advocate.