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NBC Internet is firing 30 percent of its staff, or 150 employees, across all its departments. The job cuts are part of the same old dot.com story, as another company that grew far bigger on its initial venture capital funding than it should have is forced to shrink itself while spewing talk of expense reduction. Back in August, NBCi fired 170 people, 20 percent of its staff at the time. NBCi also lowered its revenue expectations to $100 million from $150 million. NBCi predicts that it will be profitable by the end of this year or early next year, in part because it has merged its AllBusiness.com business service subsidiary into a new company, Bigvine, of which it owns 49 percent. NBCi unveiled a site redesign back in September, at which point it folded its Snap.com and Xoom.com properties into the NBCi portal. The redesign also incorporates the web sites of MSNBC and CNBC. NBC is the latest old-media company to find its new media unit in trouble. News Corp., the New York Times Co. and Time Warner have all laid off new media division employees this month.
EToys: We can’t pay
our
bills
Online toy seller eToys admits that it hasn’t been paying all its creditors.
EToys cites weak sales over the past year as the root of its problems.
While the company predicted last month that it would burn through all its
cash by March, its feeble holiday sales have left it with even less money
than expected. EToys’ creditors, among them Hasbro, Mattel and Newell
Rubbermaid, have formed a committee for addressing eToys' insolvent
condition. One creditor, staffing service company RemedyTemp, says that
eToys owes it $2 million. It has also been reported that the troubled toy
e-tailer will offer all or part of its mammoth 151,000 square-foot West
Los Angeles headquarters for sublease. EToys earlier this month closed
down its European operations and fired 70 percent of its staff.
Internet scams top list
of consumer complaints
Among all the consumer complaints received in the state of Michigan in
2000, internet scams were the most prevalent, according to Michigan
Attorney General Jennifer Granholm. This marks the first time that
either sweepstakes complaints or telemarketing gripes did not top the
annual Michigan list. Granholm, well known for her strong defense of
consumer privacy online, believes that con artists see the web as a
space free of law enforcement. The top consumer complaints about the
internet include auction fraud, privacy and "cookie" issues,
junk email, web-based pyramid schemes, problems with internet service
provider bills, access hitches and fraudulent online retail sales. To
combat fraud both on- and off-line, Granholm’s office has released a
brochure filled with tips. Above all, Granholm advises that consumers read
the fine print. The state's list of most prevalent consumer complaints was
compiled from the more than 70,000 calls the Attorney General’s Consumer
Protection Division received in 2000.
Study: Hispanics prefer English-language sites
As a group, Hispanics prefer mainstream sites to sites tailored to their
ethnicity, according to a study by market researcher Cheskin Research.
Yahoo is the No. 1 internet service used by Hispanics; its use among the
population jumped by 10 percentage points from February to
October/November of last year. In November, 68.1 percent of Hispanic
households used Yahoo, followed by America Online with 52 percent and MSN
with 48 percent. Most Hispanic Yahoo users, notes the study, are surfing
the site’s English language content, rather than surfing it in Spanish.
The Cheskin study attributes this preference for English sites to two main
factors: most Hispanic users are fluent in English, and some may not
be aware that material in Spanish is available. And yet the penetration of
Spanish-language online services is substantial. Fifteen percent of U.S.
Hispanic adults use Univision.com, which launched in August, and 9 percent
use both Terra Lycos and Latino.com. Cheskin surveyed more than 2,000
Hispanic households in February and again in November.
EBay exceeds
analysts' expectations
Amid all the dot.com financial doom and gloom, eBay appears as an oasis of
revenue and good cheer. The auction web site, founded in 1995, has
announced it brought in $134 million in revenue for the fourth quarter,
beating analysts’ expectations. EBay’s net income for the quarter was
about $24 million. Also, 3.5 million new users signed up for the auction
service, bringing its membership roll to 22.5 million people – more than
double its membership at the end of 1999. EBay users sold $1.6 billion
worth of merchandise on the site in the fourth quarter alone, a 79 percent
jump over the previous year. It also turns out that eBay won’t be held
responsible for the authenticity of the goods sold across its pages: A San
Jose, Calif., judge ruled Thursday that the company is not liable for fake
sports memorabilia that its members sell on its site.
More layoffs at
AltaVista--200 out the door
In its third significant round of layoffs in the past year, internet
search site AltaVista has fired 200 members of its workforce, about a
quarter of its staff. The job cuts, AltaVista says, are an attempt to
slash expenditures. The company cites the slump in sales of online
advertising as one reason its bottom line is hurting. For now, AltaVista
will maintain its consumer internet search business. But the company has
been concentrating of late upon its business-to-business side, namely its
search software, which it licenses to other companies. The company now
employs about 600 people worldwide. Earlier this month, CMGI-owned
AltaVista tossed out its plans to go public, citing investors’ dislike
of unprofitable dot.coms. AltaVista was the 11th most-visited web property
in December, according to the most recent monthly data from Media Metrix,
with 18.7 million unique visitors.
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