Launch announced that it will eliminate approximately 60 positions, reducing its staff levels to a total of 175 while consolidating its Santa Monica operations into one facility. Additionally, the company discontinued its European expansion plans.
The company reported that net revenues for the first quarter of 2001 were $3.8 million, compared to $6.4 million for the same quarter last year. According to a company announcement, 70 percent of revenues were from advertising and 30 percent from content licensing. Launch also announced today that it has signed a non-binding term sheet providing for $5 million in a secured convertible note financing.
The company said it expects to sign a definitive agreement within the next ten days; however, no definitive assurances can be given that this financing transaction will close or that the company will receive the proceeds. This financing, combined with the company’s existing cash position, is expected to be sufficient to fund Launch’s operations through EBITDA profitability, expected for the first time during the third quarter of this year.
Dave Goldberg, chief executive officer of Launch, commented, “We expected the first quarter to be challenging due to a weak advertising market, but we were still able to bring on new large brand advertisers such as Nike, Evian, Sprite and Mercedes-Benz. Also, our ability to increase traffic 34 percent over the December 2000 quarter, despite a significant decrease in marketing spending, is clear testimony to the popularity of Launch.com.”