Motley Fool Inc., the publisher of the popular, irreverent stock-chat Web site, said it will lay off about half of its employees, citing a too-ambitious business plan and a weak advertising market.
Motley Fool, which currently has 187 workers, will lay off 75, the company told employees Friday. The layoffs will become effective Nov. 30. It marks the third round of layoffs this year. Motley Fool laid off 45 people in June after having laid off 115 in February.
In a letter that was posted on the Motley Fool Web site, the company’s co-founders, brothers David and Tom Gardner, said the move was part of its long-term strategy to be “sustainably profitable.”
“Our plans have proven too optimistic to withstand the current business environment, and so now we are hunkering down and battening the hatches,” the co-founders said.
Company officials didn’t immediately respond to questions about what employees were affected by the staff cuts, or how the layoffs will impact the site’s content.
Motley Fool emerged in the 1990s as a popular site for visitors to exchange stock picks and financial chatter.
But the company, which had about 400 workers at its peak, has struggled with a sharp drop in online advertising this year. It has failed to stem losses despite efforts to diversify its business model and become more of a personal-finance Web site.
Just last month, the Motley Fool launched a new service that would charge investors an annual fee for personalized investing guidance from a professional financial adviser. That marked a significant shift for the Motley Fool, which had become known for empowering individual investors to make investment decisions for themselves.
But it has proven difficult for free Web sites such as the Motley Fool to convert visitors into paying customers, said Matt Carrick, an analyst at e-commerce research firm Gomez Advisors in Waltham, Mass. Because stock-market conditions have deteriorated so rapidly, investors are less interested in talking about equities, he said.
“People aren’t actively looking for new ideas,” Mr. Carrick said. “Site traffic is down and that’s going to hurt transition to subscribers.”
Other investment news organizations have also struggled to adapt to new market realities. The Street.com has started charging for some of its premium content, while Standard Media International, publisher of the Industry Standard, saw its assets sold in a bankruptcy auction on Monday.
Motley Fool’s investors include the venture arm of AOL Time Warner Inc., the Softbank Finance Group unit of Softbank Corp., Mayfield Fund and Maveron LLC.
Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved.