Glam Media Cuts Back On Salaries; GlamX Exchange Flounders

Glam MediaAs reported yesterday by Mike Arrington of TechCrunch, Glam Media is scaling back its expenses according to internal email (but external, too!) in the form of reduced compensation for its salaried employees ranging from 3-15%.  Executives will receive up to 60% reduction in salary which might be offset by bonuses if things aren’t so bad with the U.S. economy in 2009.  We wonder if the “non-executive” employees will be similarly compensated if things take off again.

Arrington postulates that many executives will likely stay at Glam in spite of reductions due to wider economic turmoil.  We think different.  The job market for top digital people remains strong from anecdotal evidence, and given Glam’s lack of proprietary technology (or anything else) and therefore vulnerable future, there appears to be no reason to stick around if something better comes along.

On the GlamX Exchange front, the internal email reveals the following:

“Glam chose to have very limited Ad Networks fill in its inventory using GlamX Exchange, a sector hit very hard in the downturn. This conservative strategy has helped build a stronger direct sales business—we could have had more revenue, but then we would have been looking at lower or even negative growth.”

What to make of this?   Apparently the Exchange at Glam is not producing revenue that is of interest to Glam.  Or, is it that the GlamX Exchange is not producing a revenue opportunity for ad networks that make them want to buy and sell through the GlamX Exchange?  No doubt the ad network and exchange models have been “dinged” like the entire online ad industry.    Glam wants us to believe that it’s the exchange model or “sector,” stupid. Hmm.

We can’t blame them for moving away from their exchange in that Glam Media makes their dollar as a vertical ad network… it doesn’t seem like the exchange “sector” is the problem, though.

The exchange bandwagon may have just lost a passenger.

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