Dow Jones & Co. and Excite@Home Corp., citing the current decline in online advertising spending and the challenges of securing further funding, said Friday they will close their Work.com Internet joint venture March 31.
The companies said the majority of Work.com's 113 full-time employees in Redwood City, Calif., where Excite@Home is based, and in New York City will be leaving the company next week. Others will remain for a variety of time periods to assist in the orderly wind-down of the company and its relationships with vendors and partners.
The Work.com venture was launched last April with investments from New York-based Dow Jones (DJ), Excite@Home and Work.com's chairman and chief executive, Donald P. Hutchinson.
The move was an attempt by Dow Jones to bolster its presence on the Internet. Work.com, which focused on small and midsize businesses, combined content from Dow Jones and Excite's existing online service for small businesses, which also was called Work.com.
The Work.com site was designed to be the main starting point to the Internet for small businesses using the Web, much as Yahoo! is for consumers.
The companies initially expected to sell a minority stake in the venture through an initial public offering last year.
The plan to sell part of the venture to the public was the latest move by traditional media companies seeking to capitalize on the value of their content for the Internet. General Electric Co.'s (GE) NBC unit had sold shares in its Internet operations, and New York Times Co. (NYT) also filed its intention with the Securities and Exchange Commission to issue a tracking stock for its Internet division. However, the New York Times and eventually Dow Jones scrapped such plans as dot-com stocks began to unravel.
Mark C. Stevens, executive vice president, corporate and business development of Excite@Home and a Work.com director, said the market for the venture's business "has not developed as quickly as expected."
In addition to the drop in online advertising spending and the difficulties in securing added funding, an accelerated focus on profitability for the venture also contributed to the decision to cease operations.
The announcement comes just two days after Dow Jones said its first-quarter earnings will fall far short of analysts' expectations and that the company will cut costs and reduce its work force. The publisher cited a steep drop in advertising revenue amid the general economic downturn.
Copyright (c) 2001 Dow Jones & Company, Inc.