It’s not a happy day at San Francisco-based Adbrite this morning. The company is laying off 40 employees, which is 40% of total staff. Among those that are leaving are VP Marketing Paul Levine and VP Finance Bob Feller.
This is the second Sequoia-backed startup to report significant layoffs after last week’s meeting where Sequoia warned the CEOs of their portfolio companies of the long lasting effects of the downturn, and urged them to control costs and become cash flow positive. On Tuesday Jive Software, also Sequoia-backed, had a significant reduction in headcount as well.
There is a silver lining to the layoffs, or at least for those who still have a job at Adbrite: The company will now be cash flow positive and profitable, CEO Iggy Fanlo and Levine said in a phone conversation. The company had gross revenues of $32 million in 2007. He won’t discuss current revenues, other than to say it continues to grow, and that October will be a record month.
This isn’t the first time Fanlo has been through big layoffs. He was President and Chief Revenue Officer at Shopping.com during the first bust, where the company let more than 200 of 300 employees go over three cuts. The company went public in October 2004, and was acquired by eBay in June 2005 for $620 million. He says one thing that he learned from going through the tough times - make cuts early and deep to give the company the best possible chance of getting through it. Clearly he put that theory into action today.
Adbrite is a top five advertising network according to Comscore. They sell advertising for 70,000 websites and serve 1.3 billion ad impressions per day.
The irony of Adbrite making cuts isn’t lost on us. The company was originally spun off from FuckedCompany.com in 2003 by founder Philip Kaplan. FuckedCompany, of course, brutally chronicled the layoffs and liquidations that marked the end of the 2000 Internet bubble (and was the subject of our 2007 April Fools prank, which was much funnier in the middle of a bull market). If the site were still live today, Kaplan would be writing about this there.
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40 employees. Now compare that figure with 15,000 that Air India is shedding.
BBC has more on that - http://news.bbc.co.uk/1/hi/wor.....673691.stm
But, it’s in India, nor does it have to do with anything on the web (you may have noticed the topical irrelevance?
it is the economy! It does not see if the business is a “web” business or an Airline or a newspaper. It affects all spheres of business model
poor poor pub.
Will he have to sell his solid gold toilet?
15000! wow!!
http://12tb.com
Iggy is an idiot
If Iggy let Levine and Feller go, he truly is an idiot. I don’t know Bob, but he seems to have a solid background. Paul has an awesome reputation, was the most knowledgeable guy in the local space. From what I heard, he was one of the key guys at Adbrite and was (finally) driving things in the right direction.
Hard to build a meaningful company without marketing and finance. Maybe these guys bolted to find something better rather than rattle around with a skeleton crew.
So the Founder of F*ckedCompany, Philip Kaplan wont add them to the deal list, So I will on web2.0fuckedcompany.com
Although, firing all these people may help slow their burn rate, this cannot be a good sign. The company was so bloated that they got rid of 2 Exec’s which goes to show they shouldn’t have been there to begin with.
My Advice to the board and Pud, FIRE IGGY!
Does this mean free lunch and our memberships to Sports Club LA are going away?
This is what happens when you drop publishers because of advertiser pressure.
would love to know more about THIS comment… pretty lame if that’s true.
It’s true. Why would AdBrite ever pay a publisher that has a dirty word, or a barely covered mammary, or possibly even something worse?
Advertisers can’t in their right mind pay for something like that, so the logical thing to do is just ban them from the network.
It’s too bad Paul is leaving. He’s extremely talented guy and well respected across the industry.
agreed, he was their best hope at success. I am very suprised
I used to work in Paul’s group at yahoo. Dude is a serious hitter. I always wondered why he went to Adbrite. If Iggy let him go, I’d be surprised. More likely levine saw the writing on the wall and is heading for greener pastures.
I’m a big fan of Paul, too.
I’ve been working for Paul for the past year and agree; he’s been a very positive force in the company and finally got AdBrite to its rightful spot at the top of the industry ‘It’ list. The company lost a few golden nuggets today.
Count me in as a huge fan of Paul’s. What a class act. Worked with him in the past, and I came out of each interaction and meeting having learned something. The company that gets him next is very lucky.
I wish the warriors who remain at AdBrite the best of luck as they continue their growth path.
If only AdBrite could improve conversation rates…they’d be hiring right now.
Seriously; adbrite brings in about 10% of what I get from AdSense on a bad day.
On the advertiser side Adbrite converts pretty well with certain offers.
I don’t get it. If they didn’t need that large staff to be operational and profitable, why were there so many employees in the first place?
It’s because the money was flowing in. It got bloated and less productive during the past couple years. Now it’s time to do some real work and people have to adjust.
Sure the money was coming in, but not so rapidly that it warranted hiring 130 people. And the company is not even 4 years old, how bloated and unproductive can you get in that time?
If they could have done it with 60 people all along–then why didnt they?
My “I know we are screwed moment” was when the executive team all got copies of the ‘long tail’ and thumped them like it was the second coming.
So by that rationale, their perceived potential for profits is proportional to the size of their staff. That’s a terrible perspective, and the fault of upper management.
I think you’re right. They were clearly less efficient than they should’ve been and now it shows. It shouldn’t take an economic downturn to see that.
At any rate, I hope all those laid off find happy homes someplace soon.
i guess Stanford University education didnt pay off.
ICE BURN!
hmm, I was actually going to try adbrite ads on a few of my websites, I dont think I will now. I’ll stick with adense.
http://gatesandjobs.blogspot.com/
Yeah, this totally impacts the quality of their ads. They’ll be missing out by not having your blog in their network.
if they make their ad more targeted like adsense, they’ll be able to get their employees back and more.
Your website is an exact example of why AdBrite has to get rid of all those bodies.
Seruiously, you have more ads on your site than the average Nascar, and supporting your awesome ‘long tail’ site and serving ads to it probably far exceeds any real benefit you provide AdBrite’s network.
FuckedCompany isn’t alive anymore but Uncov.vom is back and documents all these lay-offs….
most of the old posters, what was left of them on fuckedcompany ended up at http://www.fuckedforum.com/bbs
They had so much potential! Too Bad!
Pud needs to bring back the site F’d Company.
It is kind of comedy since the website was started in the time when no one could get advertisers easily for the website and make any money. I know I ran such a website in 1999-2000. It came out the gates basically a success with little costs I think for its small team. But now advertising is in much better shape then it was then with more competition adbrite is failing.
It was always and advertiser I would say for the more gray market websites that more legitimate companies like google maybe wouldn’t touch, or ones that have very low click through rates.
AdBrite has been a revolving door of employees for the last two years anyway. So realistically a lot of those same people might have left over the next few months but in the past they would have just replaced them with higher paid, less competent people with great corporate/college(stanford,HBS) backgrounds and no direct experience.
The real question is: Where is the “I just got laid off from AdBrite and all I got was this stupid shirt” happy hour today?
More layoffs are coming to ad network who are doing 20-40 million revenues with 100+ employees. The economic of their business models is simply not sustainable.
internets ads don’t seem to be a viable business model, firefox Plus Adblock..no ads.
The internet is based on old broadcast TV and radio ads business model, but it doesn’t work on the internet.
The entire internet ads market will/is crashing.
You are wise beyond your years. It’s not like the huge majority of internet users are on IE and have no clue what they’re doing. Pretty much everyone uses Firefox and AdBlock these days.
Yeah, I’d hate to be MortgageBust.com right now. I’d be failing the internet.
Wow, I was supposed to start working for Adbrite next week and received a call from HR this morning. I never heard of someone getting laid of before starting work
In any case, if you are a smart programmer who just got sacked there as well, send me an email.
Ironically the cuts seem to have been in the wrong place - why cut engineers, HR, marketing, and client services, all while paying a wasteoid team of ad salespeople who don’t produce?
There is one huge hitter on their team, several overpaid (but currently underproducing) old schoolers from traditional media, and a handful of super jaded people with feelings of entitlement. The three best employees there are all underpaid and treated poorly.
It disappointing that a company and crew as talented as they are made such a drastic and obviously incorrect decision. I wish them the best, but shaking up that many lives as a cheap fix for a non-functioning sales team (sans the few good ones mentioned) will come back to haunt them.
EDIT: hitter != NY employee
I thought you knew what you were talking about until you confirmed that….you have no idea obviously
Have the best day ever!
they make their money i bet through the porn side of the business at blacklabel ads. Which has turned out to be a really totally fucking shite piece of crap. Since ditching their pathetic slow and frequently broken ad code and post roll flash ads we have doubled our unique users. That’s in 14 days and now over 80k in alex ranking. Moral to anyone, never make your service slow, like EVER. Oh, and we made about $40 a month. Guess why they are going in the deadpool.
I see my bots have worked their magic. IamJizzMaster.com is now, as you said, an Alex ranking of 80k.
Trying to avoid schadenfreude and failing - but I can explain.
AdBrite is notorious for rejecting ads - and publishers - that don’t meet the Disney/Fox seal of approval. Just last month I had some empty suit there “explaining” why the laws of the state of California meant they can’t be associated with unconventional philosophical discussion websites. Yes, philosophy. Apparently the First Amendment doesn’t apply in their reading of California’s legal statutes.
And blacklabel takes that “we’re too candyass to accept your money” concept a step further. Cleverly for an adult advertising (read: porn) ad network, they ban anything associated with any “paraphilia.” So unless it’s straight, white people engaging in missionary position reproductive sex - with the lights off - don’t bother calling them up to spend your money. It would be funny if it weren’t true. Actually, it IS funny.
So, with all due respect. . . hahahaha! Lay off all the goddamned idiots. The rest of the world is eating the USA for breakfast, now. Any bozo that turns away good customers is living in a little bubble of moral rigidity - and about as useless as tits on a bull in the new world of Reality Based Economics.
Though, honestly, tits on a bull. . . titsonabull.com? Could be a good project. Just don’t bother calling AdDimwits to spend money on advertising it.
Ha!!!
Maybe if they were loyal and good to the original employees, there would of been a better ending/they had an invested interest, but were easily replaceable. Iggy should of been one of the first to go. The company hasn’t made a profit since he started. He costs more than 20 employees combined per month. 70/30 split no way profitable/no way record month..350 ad networks out there…Horrible Management.
guess pud having that drum set in his OFFICE at AdBrite was not such a good idea after all.
Headed to deadpool - start writing their obit
I t is really sad to hear that Adbrite is going to layoff so many when the Internet Marketing is still expected to keep moving up even during this slow down.
Good to see this. I have never been an ardent supporter of Adbrite. It works almost like a scam company. I had implemented Adbrite code to my site and they were showing terrible click count fraud. With the same placement, when I used to get 10 clicks in Adsense, Adbrite didn’t count even one click out of 2000 impressions. It’s not at all a recommended online earning system.
Lenin
Wow…you’d think they’d give more respect to such an awesome Blogspot site. So unfair!
Short-time pains for long-time gains. They’ll make it and eventually become a formidable opponent of adsense. Adbrite’s survival will be helpful to the internet marketing competitiveness.
Crisis is hitting everyone. On the other hand, according to Jack Myers Business report recently, it is expected to have an increase up to %70 on online ads in 2009…Ohh yeah…
Is AdBrite ending InVideo? I saw notice that they would no longer support the product and that all video players would cease to function on October 30…
McSweaterVest <3’s Heavy Hitters
I have like 3 blogs that my parents and friends read, and AdBrite only gave me $1.09 a month. That barely covers freedom.
I’m totally going to take my business elsewhere - my readers deserve that much.
You have your parents and friends read clicking on your ads?
In Adsense that would get you banned in no time.
Who else would click on ads? Interested customers enticed by the relevant content?
Get outta dodge
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In. adbrite , the payout is very very low !!
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AdBrite has pretty much bought the farm. The network is in a ruins.
It sure is tough for a lot of companies. The consumers are squeezed now; companies cannot sell things that are not really valuable. Without good products that create value and save cost, advertisement may not really help.