DoubleClick Slashes Over 100 Jobs

Just two weeks after announcing changes in its executive team, controversial Web advertising giant DoubleClick (Nasdaq: DCLK) is laying off some 5 percent of its 2,100-person workforce.

DoubleClick director of corporate communications Jennifer Blum would not confirm the number of employees being let go, but the figure is said to range between 100 and 150.

"Recently we announced that we were aligning our executive team to meet the needs of our global clients," the company said. "Today we have made further changes to the organization to better align under those leaders."

According to the company, the layoffs are "are not dramatic relative to the scale of DoubleClick" and leave the employee base "virtually flat" over the course of the second half of the year.

Slow Market

The online advertising market has been hit particularly hard in recent months, as many Web companies and retailers have slashed their ad spending budgets in recent months.

Several industry analysts have forecasted a dramatic slowdown for Internet ad spending, which had experienced explosive growth over the past several years.

In a reflection of that decrease, on Friday S.G. Cowen reportedly lowered revenue estimates for DoubleClick and portal giant Yahoo!, which depend on online ads for their revenue stream.

Shares in DoubleClick are currently hovering around the US$12 mark, a precipitous decline from January's stock value of approximately $135.

Likely Survivor

Despite the turbulence, DoubleClick is expected by many observers to be leaps and bounds ahead of its competitors.

In October, the company reported revenue of $135.2 million for the third quarter of 2000, an increase of 79 percent over the same period last year.

The firm also reported that it ended the third quarter with $894 million in cash and marketable securities, a $12 million increase over the second quarter. The company attributed the increase to $34 million provided by operations.

Signs of Hope

Despite the currently sluggish market for Internet ads, analysts believe that the Net will evolve into a viable medium for advertisers and marketers alike to build brands and target consumers more effectively than other media channels.

For instance, a recent study from the Internet Advertising Bureau and PricewaterhouseCoopers found that the Internet advertising industry saw $2.1 billion in revenue in the second quarter, with sales for the first half of the year approaching the total for all of last year.