Gordon Simpson, CEO and co-founder of 24/7 Media Europe, confirmed that the Amsterdam-based holding company is now under administration.
Additionally, the company's 13 autonomous local subsidiaries are either bankrupt or have filed for Chapter 11 with local administrators in their respective markets. The London office, with 30 employees, shut down Monday.
"I'm finding it hard to come to terms with this," said Mr. Simpson, who is also the legal director of all the subsidiaries and will spend the next few weeks involved with the closures. "We would have been profitable at the end of the first quarter next year and we were also considering management buy-out."
Two unexpected developments, however, ruined those ambitions. On Aug. 6, the company's U.S. parent company, 24/7 Media Inc., informed the European division that it could no longer provide financial support. Then on Sunday, plans to receive venture capital funds from an unidentified company also fell through.
"Our clients stuck with us and would have stayed with us had we got the finances," Mr. Simpson added.
In some ways, the news is surprising. Launched in January 1999, 24/7 Media Europe is the reincarnation of InterAd Holdings, a start-up interactive marketing venture that was itself a breakaway from Softbank Interactive Marketing a year before.
Then, 24/7 Media Inc. took a 60% stake in InterAd Holdings to create 24/7 Media Europe. With 13 subsidiaries in Europe and the ability to also offer advertisers ad space on Internet-enabled mobile phones, 24/7 Media Europe seemed to be making strides in the online ad sector.
Clients in the U.K., included the Web sites owned by British Telecommunications, BAA, and national radio station Classic FM. Advertisers that used 24/7 Europe networks included Procter & Gamble Co., Coca-Cola Co. and Kellogg Co.
In November 2000, the company sealed a groundbreaking deal with Nielsen/NetRatings Service to offer advertisers and clients the measurements of audited Web sites. And in the U.K., revenues in 2000 jumped 500% under Managing Director Carl White, who was promoted to chief operating officer for Europe in May this year.
The company's business is based on creating a network of Web sites and selling the aggregated space to advertisers. However, the group fell victim to the massive decline in online ad spend following the dot-com slump during the last year.
"There were a lot of things that we got right," explained Mr. Simpson, who hopes to stay in the sector when the bankruptcy administrative procedures are completed.
The news comes after the closure of 24/7 Media's Latin American operations in January. The demise of the European and Latin American businesses come shortly after 24/7 Inc. announced plans to focus on its North American operations. The Asian arm, which is majority-owned by Chinadotcom, is reported to be rebranding its business. -- Juliana Koranteng
Copyright September 2001, Crain Communications Inc.