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Ticketmaster Plans to Cut 17% of Staff at CitySearch

Internet: Amid weak ad sales, trims at the online entertainment guide are part of an effort to become profitable.

July 04, 2001|JEFF LEEDS | TIMES STAFF WRITER

Los Angeles-based Ticketmaster said Tuesday that it planned to lay off about 17% of the employees of its CitySearch unit over the next couple of months as part of a long-planned restructuring.

The layoffs, which are expected to affect about 90 employees at the division, come as numerous Web companies are reeling from a plunging advertising market. CitySearch has relied heavily on ad sales to support its business model of producing entertainment guides tailored to individual cities.

Kandus Kane, a company spokeswoman, said the cuts are part of a cost-cutting strategy laid out last year in an effort to make the division profitable by 2002.

Prudential Securities financial analyst Mark Rowen said the weak online sales are pulling down Ticketmaster's share price. Rowen said he applauded the division's belt-tightening steps but cautioned that the local advertising market "will remain difficult for some time."

In response, CitySearch said it increasingly has been trying to sell regional and national advertisements. Last year, the division cut about 150 jobs, including those of some employees who focused on local sales. After the new round of layoffs, the division will have about 450 employees, Kane said.

According to regulatory filings, Ticketmaster's city-guides division lost $9 million before interest, taxes, depreciation and amortization for the quarter ended March 31. The cash flow loss for the same period a year earlier was $15.5 million.

The company continues to be a dominant player in the online city-guide market. It acquired one of its biggest rivals, Microsoft's money-losing Sidewalk site, about two years ago.

In Nasdaq trading Tuesday, shares of Ticketmaster fell 24 cents to $14.81 and its parent, USA Networks, fell 50 cents to $27.

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