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Another layoff story from another struggling dot-com. Déjà vu? In more ways than one. This time, the reeling company is online consumer-ratings and buying service Deja.com, which has pink-slipped at least 10% of its 150 employees, according to Chief Strategy Officer Richard Gorelick.
The layoffs -- described by Gorelick as a "light cut" -- targeted technical and operations staff from the company's two offices in Austin, Tex., and New York City, with about two-thirds of them from the Lone Star State. They come amid what has been a turbulent restructuring for the five-year-old outfit, already on its third business plan.
The discharged employees were working on "internal projects that weren't going to dramatically increase our profits near term," said Gorelick, adding that the company is "not concerned about running out of money."
"By reducing our expenses and our burn rate, we get profitable pretty soon," added Gorelick, though he would not say exactly when.
VCRs TO VETERINARIANS.
Deja began its life as Dejanews.com, a Web site for easily accessing postings from Usenet, the popular Internet newsgroup service. In May, 1999, it shortened its name and relaunched as a site where consumers could swap opinions on thousands of products and services, from VCRs to veterinarians. In March, Deja molted again, this time into what it calls a "precision buying service," where consumer reviews are bolstered by expert opinions, related magazine articles, and numerical ratings.
Alas, the financial reviews on Deja have been less than stellar: Last spring, it filed for a $57.5 million initial public offering, which was stalled for nearly a year, as the market for "content" IPOs flagged. At the time of its registration, Deja was singled out as a company that had thin financials, with 26% of its $5.3 million in yearly revenues then coming from bartered, or noncash, advertising agreements. On June 2, it withdrew its papers at the behest of the Securities & Exchange Commission, which said the information was now outdated.
Consumer-opinion and review sites have proved popular on the Net, but few entrepreneurs have figured out how to make money off other people's bluster. On May 26 competitor Brandwise.com, backed by Hearst, Whirlpool, and Boston Consulting Group, closed shop, laying off 50 employees.Nirav Tolia, CEO of 100-employee Epinions, another site where consumers swap advice and expertise, says there are no layoffs on the horizon for his site, "but no matter what space you're in, you have to conserve capital. It just isn't flowing like it used to."
By Dennis Berman in Los Angeles
EDITED BY DOUGLAS HARBRECHT
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