Despite Troubles, PlanetGov Aims for Profitability in 2001

Despite Troubles, PlanetGov Aims for Profitability in 2001

PlanetGov.com, which laid off 45 people Dec. 21, is aiming to achieve profitability next year, chief executive officer Steven Baldwin said Dec. 27.


Baldwin said PlanetGov has no plans to close up shop or shut down its Web site.


"We were working to raise additional capital, but it wasn't a good time to do that, so we decided to scale back and return the company to immediate profitability," Baldwin said.



PlanetGov was profitable in 1998 and 1999 and will be profitable in 2001, he said.


The private company in Chantilly, Va., provides products and services to the federal government and its employees.


The cuts at PlanetGov are emblematic of a nationwide trend. Layoffs at Internet companies rose 19 percent in December to a record 10,459, according to a report released today by outplacement firm Challenger, Gray & Christmas Inc.


PlanetGov's layoffs included 18 of 20 editorial staff members. About 145 workers remain, Baldwin said, most of them in sales, marketing and engineering. At its largest, PlanetGov employed about 190 earlier this year.

The company has about $250 million in annual revenue, and in November was named one of the 500 fastest-growing technology companies in North America by Deloitte & Touche LLP.


The difficulties of dot-coms are due in part to a scarcity of venture capital. PlanetGov's Web site was first supported by $5 million from Blue Water Capital in McLean, Va.

This fall PlanetGov hired investment bank Friedman, Billings, Ramsey Group Inc. of Arlington, Va., to search for an additional $20 million in venture capital, but like other Internet businesses, found financing too scarce and too expensive, Baldwin said.


PlanetGov was founded as Intellisys Technology Corp. in 1983 as a reseller of IT products and services to the federal government. In May, the company launched its Web site, PlanetGov.com, and changed its name to PlanetGov. The company's services include e-procurement and legislative and travel resources.


When the Web site launched, company officials envisioned its content would draw visitors to the site and its other offerings. However, most of the content didn't prove to be profitable, Baldwin said.


Now, only Mike Causey, a veteran journalist who wrote the popular "Federal Diary" column for the Washington Post, and Juliana Winters, who writes an advice column, remain in the newsroom. Their contributions were the most heavily trafficked portions of original content, Baldwin said.


Baldwin said he could envision raising additional venture capital when the market improves, but the company probably wouldn't hire more editorial staff.


"It would have to be someone that would have a following akin to Mike Causey, and I'm not aware of anyone else in the government space that has such a following," he said.


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