GeoSign of the Times

Post Arbitrage Crackdown's High Profile Casualty

[incrediBILL]

GeoSign, who most recently was making news with a $160M in financial backing [webmasterworld.com], just announced massive layoffs [guelphmercury.com] a couple of months later. The follow-up article [guelphmercury.com] suggests as many as 50-100 got the axe.

Internet rivals are following this general trend in the industry, he said, adding it's not a question of the firm being forced to cut back because of dwindling funds at its disposal.

I'm not buying that statement considering they were rumored to be spending $1M/month to generate $20M/month and have a $160M in backing.

It seems more likely the arbitrage crackdown at Google must've seriously impacted their revenue stream otherwise they would be hiring and growing, not firing and retreating to a better cash flow position.

Hard to be sure, but it's a good speculation based on all the June 1st arbitrage site closings [webmasterworld.com] and the uncanny timing of their layoff news.

[edited by: incrediBILL at 8:23 pm (utc) on May 30, 2007]

[herb]

From the GeoSign Web Site

More than 180 consumer websites
Over 35 million online visitors each month
215 team members and growing
300% employee growth in the last three years
99% employee retention

[martinibuster]

Looks like some belt tightening. Wonder if they can successfully transition to a CPM model and deal directly with Madison Avenue. They're looking for targeted eyeballs.

[AhmedF]

But how does this effect TrueLocal? From all indications it was their publishers who got fired.

[zett]

Sorry to pull that thread up again, but in my view this is GREAT news. Certainly a number of publishers can now re-visit their filters and get rid of some (now obsolete) entries.

(Having said that, I also have to say that this is quite sad for the employees who got their notice. I guess at least some of them were unaware of the problems of Geosign's business model.)