The stock market sent their stocks tumbling. Even the once invincible ad network and ad management company DoubleClick laid off about 150 workers or 8% of its workforce and announced an earnings and revenue shortfall for the next two quarters.
CMGI-controlled Engage also had bad news. Last month, President-CEO Paul Schaut resigned. And last week, it announced losses would be larger than expected. Engage had a net loss of $173.8 million on revenue of $41 million. Layoffs also hit 24/7 Media, which due to revenue shortfalls, chopped 200 employees in a cost-cutting move.
Dana Serman, research analyst at Lazard Freres & Co., said the ad blitz of late 1999 and early 2000 allowed many ad networks to compete by undercutting their competition with rates. The networks also over-hired, something that will have to be adjusted in the coming months. He expects more consolidation in the industry.