Not out of breath yet

Oxygen gets an infusion of new money from an old backer

By John M. Higgins -- Broadcasting & Cable, 12/11/2000

Following the trend of the "new" new economy, Oxygen Media raised another $100 million from backer Paul Allen, then promptly restructured its Internet operation and laid off 10% of its workers.

It became increasingly clear that Oxygen's Internet strategy was overkill, with 17 different Web sites on topics of interest to women, such as beauty outlet Picky or Moms Online. But the sites were too expensive to produce and maintain.

So the company will boil the operation down to four sites: Oygen.com, Oprah, Young Audiences and health site Thrive. They may use much of the content of the folding sites, but the move will eliminate technical costs, particularly since some of the sites were produced on disparate platforms.

The company will cut 44 full-time and 21 part-time workers and shutter its Seattle office.

Reducing the network's losses-which one industry executive pegged to be $250 million so far-helped persuade Allen to re-up. Last year, he had put in $100 million, buying somewhat safer preferred stock rather than straight common equity.

Oxygen Chairman Geraldine Laybourne said in a statement that, with the layoffs the company is "streamlining Oxygen's business by redirecting our resources and staffing, and consolidating our operations in New York."