AllAdvantage, a company that pays people to look at ads while they surf the Net, announced Friday that it would lay off 100 workers, about 18 percent of its staff.
Like many another Net company, Hayward, Calif.-based AllAdvantage is struggling to find the magical path to profitability. But this recent layoff isn't the company's first cost-cutting move of the year.
"As the business climate on the Internet has changed, we've changed with it," Jacques Clay, the recent COO hire who was promoted Friday to president and COO, said in a statement. "We are lean and mean and in position to grow the company to market leadership." A source close to the company says Clay is "determined to pull the company together by looking at the bottom line." But the bottom line appears to have been written in red ink.
All in all, it's been a hard summer for AllAdvantage. The first sign of trouble came when the company revamped its payout method. It informed its U.S. members in June that they would get paid for fewer hours of surfing per month - 15 instead of 25. Soon after, the company pulled its IPO. In July, it cut 60 jobs.
AllAdvantage's customers agree to submit information about their interests, allowing advertisers to target ads at them. Members download free software, which places a one-inch-high horizontal "viewbar" on their screens. The company then sends out a variety of ads to match that member's interests, and pays members according to how much time they spend surfing.
Response to the idea of getting paid to surf was initially overwhelming - so much so that the company had to pay out more cash to members than it could attract from advertisers. During the first three months of 2000, the company paid $32.7 million to members but took in just $9.1 million. The company has spent $102.7 million since its inception.
Yet AllAdvantage, with what looks like an impossibly optimistic business plan, isn't giving up. It has once again retooled its pricing structure. (Members now get 20 cents an hour for 20 hours of surfing a month, rather than the revised figure of 53 cents an hour for 15 hours of surfing.) It will offer members the chance to win a daily sweepstakes and says it hopes to enable members to spend their accrued cash on products online. It also has created an ad network to sell space on third-party sites.
Other companies with similar models have fared poorly. New York-based BePaid.com attracted a flurry of investor and consumer interest but has struggled to get its act together. Boulder, Colo.-based Epidemic Marketing, which paid people to put ad graphics at the bottom of their e-mail messages, shuttered its business this summer.
Check out The Standard's Dot-Com Layoff Tracker for a look at which sites have cut workers or closed up shop. Also, e-mail any tips on layoffs or closures to layoffs@thestandard.com.
