For Zatso, not so greatso

Personalized Internet newscast firm cuts staff to draw cash
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Zatso.com, which offers viewers the opportunity to create personalized Internet newscasts and has partnerships with 42 stations, including Media General, Meredith, and Scripps Howard stations, laid off roughly half of its staff to save money and make it more attractive to potential investors.

"We discovered that the funding and financing to continue operation wasn't coming through at the degree we had thought, and so we made the painful decision to downsize, or, as it's called in the Internet market, rightsize," says Craig Marrs, Zatso vice president of business development and affiliate relations. "We're sized for our existing partnerships."

The San Francisco-based company now has 38 employees, and Marrs says the company will continue to serve its clients as usual. "We made this move in anticipation of looking more attractive to the investment community, and we've had positive reaction from the investment community so far," he adds. "With this move we have a chance to extend our life."

Zatso is currently offering its personal newscast service on approximately 35 Web sites, allowing site visitors to register and indicate news-topic preferences. The range of news includes news gathered from the affiliated stations as well as stories created by partners including Bloomberg Television, CourtTV, Quokka Sports, C-SPAN, and The Weather Channels.

Karl Rhodes, manager of external communications for Media General says that the company has a 5% stake in Zatso and 11 stations online with the service. "We'll bring three more online in the next 30 days and we expect to have all of our stations online with Zatso by the first quarter of 2001," he adds.

Marrs says Zatso's business plan calls for advertising revenue to start in the second quarter of 2001. The ongoing efforts to keep the company afloat, which include a potential merger or acquisition, are designed to keep the firm alive until then.

Zatso's position has become common in the streaming-media segment, which requires hefty pre-revenue investment and still awaits a critical mass in broadband deployment. The stock-market plunge in April has made the raising of capital more difficult.

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