Despite Industry Gloom, Internet Marketing-Related Companies Receive Funding

Over the past month, news on the online marketing vendor front
has been schizophrenic to say the least. Engage,
MessageMedia, Advertising.com, LivePerson and LifeMinders
among others have made substantial staff cuts due to what
MessageMedia calls, "softening industry conditions" and
investor pressure to become profitable more quickly.

Related advertising-based media are also feeling the pinch.
Larry Chase of Web Digest for Marketers has reacted by
announcing pricing cuts. Andy Bourland of ClickZ has openly
proclaimed the need for e-publishers to find alternative
revenue streams ... quickly. Anne Holland, Publisher of
MarketingSherpa (our parent company) told us many i-ad
industry vendor's media buyers are still chewing over their
first quarter ad buys, "Usually people are starting to make
second quarter decisions by now, but in this marketplace
everyone's dragging their feet."

On the other hand, every single interactive ad agency
MarketingtoWebMarketers has spoken with in the past 60 days
has said business is booming. Most offline companies who
advertised online in 2000, have expanded the percent of their
budget they plan to spend online in 2001. Also, every day
sees hundreds more offline marketers with big budgets around
the world, begin to get Internet religion. So the agencies,
such as Carat, that serve them are opening new branches like
crazy.

Some vendors are also getting funded. Last week e-Dialog got
$10.5 million second round funding, while WebSideStory, Inc.
pulled in $7.5 million in equity. Now they just have to
handle the P2P and everybody will be happy.