Engage has pulled the plug on its media business in Asia and
Australia, while the future of its software marketing business looks
"very questionable", according to a senior executive at the company.
The closure follows a weakened demand for ad technology and media
services, which has resulted in the demise of many dotcoms, and will
result in the lay off of at least 20 of the 30 staff employed by Engage
regionally.
The company has closed offices in Singapore and Australia, while the
future of its Hong Kong software operation remains uncertain.
Engage Asia was set up last year by Colin McIntosh, president of Engage
Asia/Australia, after the company acquired Space Asia Media in Hong
Kong.
However, signs that the company was facing difficulties appeared when
its holding company CMGI decided not to renew funding.
McIntosh explained: "We are in a similar situation to other companies
that have parents in the US, because the businesses practices that work
there don't work here. The main reason for the closure is the global
environment.
But as Space, we offered a broader range of services. As Engage we have
been confined to the model from the US and that did not necessarily meet
the needs of the market here. It was restrictive on our business
operations and that didn't help."
He added the company had worked to conclude all client projects in time
for the September 28 closure. Engage's client list included 200
advertisers and 300 publishers.
Engage had sacked an estimated 45 employees in Asia since January, and
had closed its Malaysia, Thailand and Korea offices earlier this year,
in an effort to cut costs.
In August, it cut staff numbers by 20 per cent worldwide, marking its
second round of lay offs after it sacked 550 staff internationally in
January.
Other online ad-dependent companies have either restructured or closed
operations due to the dotcom downturn. 24/7 Asia recently decided to
rebrand and change its name in an effort to expand offerings to
advertisers and evade the online ad slump, while CMGI closed Adforce - a
competitor to Engage - in June.
