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Thursday, 18 January, 2001, 22:55 GMT
More web workers axed
Altavista screen grab
Altavista users conduct 50 million web searches a day
Internet search giant Altavista is laying off 200 people, 25% of its workforce, because of sluggish online advertising demand.

NBC Internet (NBCi), the online media company, also said it will cut its workforce by 150, 30% of its workforce, for similar reasons.

The announcements came just a day after cable news channel CNN said it was cutting 400 jobs, a third of them from its interactive unit.

Peter Mills an advisor for San Francisco-based Altavista said its parent corporation, CMGI, was increasingly concentrating on its search engine software business, which licenses its technology to other companies.

Altavista has undergone several reorganisations over the past year - including two rounds of lay-offs - after unsuccessfully trying to build itself into a general interest portal like Yahoo.

Profit target missed

But Altavista has had other difficulties, such as the resignation of several top executives, including the chief executive officer last year and the cancellation of plans to launch a flat-rate internet service in the UK.

And it has not fulfilled predictions made last year that it would turn an operating profit by early 2001.

However, its expansion into the search software business is going ahead rapidly, a company spokesman said.

It now has more than 1,100 global customers including Amazon.com Inc and Nordstrom Inc..

Altavista's users are estimated to conduct 50 million web searches a day.

NBCi, which axed 170 jobs last year, cut its revenue forecast for 2001 to $100m from an earlier projection of $150m.

Wall Street analysts expect NBCi to have made a loss in 2000, but the firm said it expected to become profitable in the fourth quarter of 2001 or the first quarter of 2002.

Chief Executive Will Lansing, said: "To reach this goal, we needed to make difficult decisions on the operational side of our business to account for the challenges within the online advertising market."

CNN cuts

CNN, the pioneering 24-hour cable news channel that rose to prominence during the Gulf War, said on Wednesday it was planning to cut 400 jobs, nearly 10% of its work force.

One third of the job cuts will come from its interactive unit, including CNN.com and CNNfn.com.

Another third of the cuts will come from the programming division.

In addition, Shelby Coffey III, the president of CNN's business and financial news network (CNNfn) has resigned.

Troubled times

CNN plans to roll the operations of its news web sites into the television channels, a strategy used by other media companies recently to cut costs.

The long-rumoured cutbacks come at a troubled time for many media companies, which are grappling with the prospect of slower advertising growth this year.

In 2000, advertising was boosted by the aggressive campaign of dot.com companies, many of which have failed in the last year.

The prospect of a slower overall economy has put pressure on advertising budgets of established companies as well.

Growth in online advertising, the main revenue source for many internet news sites, is expected to slow considerably compared with last year.

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See also:

11 Jan 01 | Business
Altavista cancels stock listing
06 Mar 00 | Business
Altavista heralds net revolution
06 Mar 00 | Business
The growth of Altavista
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