As the temperature rises to record highs, Internet advertising firms continue to shed workers and units like excess clothing. At the end of April, top online ad agency Hook Media filed for bankruptcy protection and is now preparing to sell its assets to Havas Advertising, as the New York Times reported Thursday.
Hook Media reportedly filed for Chapter 11 bankruptcy protection in a federal court in Boston on April 23. A company executive attributed the decision to the market downturn and to the financial problems of one of its large clients. The company opened an office in Atlanta in August and closed it in February, and it has laid off employees in its Boston headquarters and New York office. As recently as December, the Times said, the company planned to open offices in Chicago and Los Angeles in the first half of 2001.
Negotiations are "pretty far along" for Havas to buy Hook's assets and hire most of its remaining employees, CEO Don Epperson told the Times. Hook's clients include U.K. bank Barclays, online learning site Learning Network, Web design software firm Macromedia and online recruiting site HotJobs.com.
In mid-morning trading, Havas had gained 4 cents, or 0.3 percent, to $13.64.
While the advertising and services economies remain depressed, larger firms will continue to look for opportunities to buy smaller firms or units that are still profitable.
The San Francisco office of creative agency FCB Worldwide, which is owned by True North Communications, is also feeling the effects of the severe drought in technology ad revenues. The company has cut 12 percent of its 350 employees in San Francisco, or about 40 workers, as Advertising Age reported on Wednesday. FCB said the cuts were the result of weak business in the city. The firm also said the cuts were specifically tied to moving its Compaq and AT&T Wireless accounts to New York. The $400 million AT&T Wireless business is under review.
At 10:52 a.m. EDT on Thursday, True North had gained 38 cents on the day, or 1 percent, to $37.94.
