After staff reductions and a reorganization late last year, in-game advertising firm IGA Worldwide may now seek a buyout if it can't close a new round of funding, according to media reports.
In-game advertising firm IGA Worldwide may seek a buyout if it can't successfully close a new round of funding. Chairman Justin Townsend is believed to favor the new funding deal, but won't rule out a sale of the company, according to VC-related news site VentureBeat. According to the site, any interested buyers must register their bids by March 27th. IGA has high-profile deals with publishers such as Sony, EA and Activision, and announced its 30 millionth unique user in October of last year. However, the general downturn in advertising budgets forced IGA to lay off 25 percent of its staff in November, according to Townsend. Apart from the general advertising downturn, the company was forced to create a new business model after guaranteed payments to publishers in exchange for advertising rights in games no longer became viable. "We had to sit at the table and come up with a new business model that worked for all parties," said Townsend. VentureBeat reporter Dean Takahashi’s report suggests that the company is now aiming for around $3 million in revenues per quarter, after reaching a low of $1 million following the credit crunch. Although the privately-held company does not publish its finances, Takahashi suggests that the company made a loss of $11 million on revenues of $3 million in 2007, with the 2008 financial year expected to see losses of $26 million on revenues of $3.4 million.
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