July 3, 2001 1:20 PM PDT

Ticketmaster to lay off 90 at Citysearch

Ticketmaster said Tuesday that it plans to lay off about 90 employees from its Citysearch.com unit in the next several months as part of a strategy to cut costs.

The layoffs, which will amount to about 17 percent of the staff, are part of belt-tightening measures Ticketmaster initiated last year in an attempt to reach profitability by 2002. Citysearch, a unit of the ticket sales giant, is an online entertainment guide for cities around the world.

"The changes reflect Citysearch's ability to leverage its national network and operate efficiently," said Kandus Kane, spokeswoman for the division. She said the company will have about 450 employees after the layoffs.

Like many other Internet companies, Ticketmaster has been forced to scale back operations because of slowing online advertising sales and an overall market downturn. Citysearch is largely dependent on advertising for revenues, and the company has seen its sales wither after the market turned sour last year.

"Just look around; it's tough out there," said Lisa Allen, research director at Forrester Research. "But Citysearch has hung on a bit longer than some of its competitors that either fought back or it acquired, such as Microsoft's Sidewalk.

"It seems that no one is immune from marketplace pressures."

In a research note from Prudential Financial, analyst Mark Rowen said Citysearch has been costly for Ticketmaster to run because of a slack ad market. He praised the cutbacks as necessary for the company to reach profitability.

"One of our primary concerns about Ticketmaster has been the losses generated by the Citysearch division," wrote Rowen, who rates the company's shares at "hold." "We have been skeptical that management can reach its (profitability) goal in the Citysearch division by 2002 without significant improvements in the online advertising market and changes in its cost flow."

Although he said the layoffs were a "step in the right direction," Rowen added that he expects the local advertising market to remain soft for some time.

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