The layoffs at Spot Runner are a lot worse than we expected. Instead of 50 to 75 people, Spot Runner is cutting much deeper—eliminating 115 jobs. Co-founder and CEO Nick Grouf characterizes this as “under 30 percent” of the company’s total headcount (which he declines to specify, but must be at least 384 people). We’ve added them to our Layoff Tracker. The majority of these cuts, he tells me, will come from the company’s local-search advertising business, which came out of the acquisition of Weblistic back in March.
That acquisition turns out to have been ill-conceived. Just because Spot Runner sells TV ads to local merchants does not mean those same businesses want to buy search marketing ads from Spot Runner as well. Grouf is now looking for “strategic alternatives” for the business, meaning he wants to dump it on another buyer.
That is probably for the best. He has his hands full trying to build a technology platform for TV advertising at a time when all advertising is going to take a big hit. Although Spot Runner’s main appeal is to local businesses with limited advertising budgets, it has been trying to scale up by signing on bigger national accounts. Those national sales, however, are not doing so great. One reason for this may be because Joanna Bradford, the high-profile executive Grouf hired from Microsoft to oversee the national sales team, jumped ship in September to go work at Yahoo. That’s right. She preferred taking her chances at Yahoo than stick around at Spot Runner after only six months on the job.
On the bright side, Spot Runner still has plenty of cash in the bank, after raising $51 million last May. But rather than spend it on acquisitions or geographic expansion, it might simply turn out to be staying-alive money until the economy rebounds. Grouf hints that one area he is investing in is his Media Platforms group, which is developing technologies to “improve the way TV advertising is bought and sold.” Making TV ad campaigns as measurable as Web ad campaigns is certainly a nut that has not yet been cracked.
Cracking that nut is a matter of survival for Spot Runner. Otherwise, it is nothing more than a broker of TV ads.