Miva to Outsource Functions, Cut 50 Jobs

[dotCOM_host]

Can someone help me decipher this press release from today? MIVA will outsource services and cut 50 jobs to save $20 million over the next 7 years, but to do so, Perot Systems will charge them $40 million to implement this plan? Either I'm not reading this right, or the person who wrote this PR piece got the numbers backwards, or...? I have a bridge or two I'd like to sell to MIVA as well, if this is how they "save" money... :confused:


Source: http://www.forbes.com/feeds/ap/2007/05/14/ap3719529.html

Miva to Outsource Functions, Cut 50 Jobs
Associated Press 05.14.07, 5:56 PM ET

"Miva Inc., an online advertising services provider, on Monday said it plans to outsource some information technology, development, service and support functions under a broader plan designed to save more than $20 million over seven years.

Miva said Perot Systems (nyse: PER - news - people ) came up with a master services agreement which should modestly reduce costs in 2007, though it will cost a total of about $40 million to implement.

The plan will Miva's work force by about 50 people, giving the company a work force of about 260 employees by the end of September. The job cuts will represent a reduction of 141 employees since the end of 2006. [...]"

[Nerd Boy Inc]

Dear All,

Will the last one in the Miva office please turn off the lights!

[wmgilligan]

A little better reading:
http://www.forbes.com/businesswire/feeds/businesswire/2007/05/14/businesswire20070514006186r1.html

My 2 cents:
Follow closely this quote from the CEO in the press release Remik mentioned:
"We expect to gain efficiencies and greater flexibility in our cost structure while we maintain focus on continuing our transition into more of a consumer-oriented direct marketer," said Peter Corrao, chief executive of Miva, in a statement.

Notice it says "continuing our transition into more of a consumer-oriented direct marketer"

That means - say goodbye to MIVA Small Business.

So what Jeff said should be: "Last one to leave MIVA San Diego - please turn out the lights".

We need to buy this thing! JAMES - speak to us..

Bill

[wmgilligan]

Remik -
I believe they mean that it will cost $40 million to do, but will still save $20 million over the seven years.
That means they are presently spending 60M over the seven years, and if they spend 40M - they will still save 20M.

bill

[Nerd Boy Inc]

Dear All,

Note this Quote / Pargraph:

<MvSnip>

About MIVA(R), Inc.

MIVA, Inc. is an online advertising and media company that operates across the US and Europe. MIVA's mission is to deliver valuable digital audiences to advertisers, which is achieved through two distinct divisions: MIVA Media, which offers Pay-Per-Click Ads across both vertical and contextual networks and MIVA Direct, which offers display and toolbar advertising solutions and focuses on the development and monetization of consumer sites.

</MvSnip>

Did anyone besides me notice there was no mention of Miva Small Business?

[wmgilligan]

From the MIVA site - press releases:

Revenue (Mil.) Paid clicks (Mil.) Gross Margin TAC (Net)

Business Q1'07 Q4'06 Q1'07 Q4'06 Q1'07 Q4'06 Q1'07 Q4'06
Small Business/Other $0.5 $0.4 - - 94% 87% - -

In Q1 of 2007, Small Business Division (Merchant) made just .5 million ($500,000). In Q4 of 2006, just .4

Not very much....
If you figure mivacentral likely made $200,000, then Merchant only generated $300,000.
Great for a small business like ours - but for a listed company....

Bill

[leslienord]

Here's a different twist on the same story from the Houston Chronicle (http://www.chron.com/disp/story.mpl/ap/fn/4802914.html)

Hmmm, Houston we have a problem?

Geez, no wonder nothing is getting fixed - MIVA is too busy doing everything but MM.

MIVA Launches Spill.com - a New Movie Community and Animated Review Site (http://digital50.com/news/items/BW/2001/07/14/20070510005292/miva-launches-spill-com-a-new-movie-community-and-animated-review-site.html)