GeekMBA360

Career and Money Advice At The Intersection Of Business And Technology

GeekMBA360 header image 2

Adbrite Layoff — Is this the beginning of more ad network layoffs?

October 16th, 2008 · 4 Comments

TechCrunch reported that ad network Adbrite laid off 40% of its workforce.

After layoff, Adbrite will have about 60 employees. Assuming $175K annual expense per employee, their run rate will be around $10,500,000 per year. Based on their $32million gross revenue, assuming their margin is about 30%, their net revenue (i.e. the revenue after paying publishers, which is usually 60 to 80% in the industry) will be around $9.6 million.

So, give and take, they probably would be barely profitable or break-even after tightening their belt. There are a number of ad networks with revenue in the $30 million neighborhood. It’d be interesting to see if these companies can continue to grow, or they’ll hit the plateau. I think that it’s relatively easy to grow to $30 million in revenue. But, going from 30 million to 100 million is going to be very tough for a lot of those players.

Prediction: more layoffs are coming to ad network who are doing 20-40 million revenues with 100+ employees. The economic of their business models is simply not sustainable.

Tags: Beat Recession

4 responses so far ↓

  • 1 rob // Oct 21, 2008 at 3:24 pm

    what about affiliate networks: are they in the same situation as ad networks?

  • 2 GeekMBA360 // Oct 21, 2008 at 7:33 pm

    Thanks for your question. I just wrote an entire post to answer your question. (https://www.geekmba360.com/?p=291). You probably work in the affiliate marketing industry. I’m curious to hear about your though/feedback on this.

  • 3 MajorTom // Mar 11, 2009 at 12:28 am

    Looks like they've gone downhill faster than anybody expected. Adbrite network has been in bad shape for months now. Lot's of disgruntled publishers.

  • 4 MajorTom // Mar 11, 2009 at 4:28 am

    Looks like they've gone downhill faster than anybody expected. Adbrite network has been in bad shape for months now. Lot's of disgruntled publishers.

Leave a Comment