Web ad player 24/7 Real Media (Quote) has sold its broadband and
professional services unit to the group's management, furthering the
company's lengthy efforts to shore up operations.
The New York-based ad network and technology firm, created through the
October 2001 merger of 24/7 Media and Real Media, said its IMAKE subsidiary
would be bought out by the unit's president, Mark Schaszberger. The company will receive up to $6.5 million, and will retain nearly a 20 percent stake in the spun-off unit.
For some time, 24/7 Media has gone back and forth about the future of IMAKE, which
provides software for the distribution of digital content, as well as
installation and consulting services. Since its acquisition in 2000 for $75
million in stock, the Bethesda, Md.-based group contributed only slightly to
company revenue, yet was seen by some insiders at 24/7 Media as a
potentially lucrative venture.
Nevertheless, the need for 24/7 Real Media to slim down on business
expenses, and the fact that the unit seemed to be outside of the company's
chief focus on Internet advertising, ultimately sealed IMAKE's fate.
Under the terms of the sale to Schaszberger's group, 24/7 Real Media will
receive $500,000 in cash, as well as preferred stock equivalent to a 19.9
percent ownership interest. Additionally, 24/7 also received a secured note
for $6 million, payable monthly. Two-thirds of that $6 million is
contingent on the spin-off's future revenue, though specifics were not
disclosed.
"In light of today's marketplace realities, we are pleased to complete
this sale in a manner that enables us to focus on our core businesses while
still participating in the future success of this division," said 24/7 Real
Media chairman and chief executive David Moore.
The move is the latest cost-cutting effort by 24/7, which is aiming to
turn a profit by the end of the year. During the past 12 months, the
company has sold off its Exactis e-mail unit, its Sabela ad serving
division, and its European media network. (Through the merger with Real
Media, however, the company again picked up representation deals with sites
in Europe.)
"We have streamlined our product and service offerings to create an
integrated suite of solutions for marketers and publishers," Moore said.
"These are the segments that we believe will most effectively move the
company towards our goal."
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