ABCNews.com laid off "less than 5%" of its employees last week, in response to stagnating advertising sales, The Industry Standard has learned.
Katherine Dillon, VP and general manager of ABCNews.com, confirmed the story and said the layoffs cut across different positions at the news organisation but did not come out of sales or technical staff. She wouldn't say how many people were laid off or the total number of people employed at ABCNews.com.
"It really is a natural course of events for ABCNews.com," Dillon said. "We took a long and hard look at what we were doing. We want to focus our resources where we can be successful."
Dillon said that Disney is doing all it can to find positions for the laid-off workers at ABC.com, the Starwave operations and the upcoming Go Network.
ABCNews.com, a content arm of the broad Disney online outfit called Buena Vista Internet Services, has incurred significant losses since its inception in April 1997. A proxy that Infoseek filed with the Securities and Exchange Commission three weeks ago revealed that the news organisation has lost $US21.5 million since April 1997. The losses were balanced by revenue of only $9.1 million, of which only $3.9 million came from online advertising. Infoseek's proxy marked the first time a media conglomerate's online revenues had been revealed publicly. The proxy also revealed that ESPN.com lost $7.2 million over the same time.
The news of the layoffs comes just weeks before Infoseek shareholders will vote on the complex three-way deal between Infoseek, Starwave and Disney to create a new portal dubbed the Go Network.
For its part, Infoseek reported Thursday that its Q3 earnings came in 2 cents lower than analysts' expectations, despite doubling revenue over the same period last year. The company reported a net loss of $2.6 million, or 8 cents a share. Revenues this quarter jumped to $19.2 million, a 129% increase from the $8.4 million from the same quarter last year.