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Advice site swallows bitter pill with layoffs

Online advice site lays off 15 percent of its staff in an effort to move away from the business-to-consumer market and refocus on providing services to businesses.

    Online advice site has laid off 15 percent of its staff as part of a corporate restructuring.

    The Menlo Park, Calif.-based company cut 17 staff members last week in an effort to move away from the business-to-consumer market and refocus the company on providing its technology and services to other businesses.

    Despite the layoffs, is "not in trouble," said company spokeswoman Emily Magee, noting that is hiring for sales and engineering positions.

    "We are realigning our resources to go after this huge opportunity in corporate services," Magee said. "We're building up the departments that are most crucial to our new strategy."

    The layoffs were effective last Tuesday, she said. Employees were given a severance package. is the latest company to announce a restructured business model.

    The online advice market has become increasingly crowded in recent months. In addition to start-ups such as, and, also vies with portal giants such as Yahoo, NBCi and Microsoft's MSN, all of which recently entered the advice service industry. has already made steps toward partnering with other businesses. In July, the company announced an agreement with that links readers to's experts. In June, signed a deal with Ask Jeeves to advertise its services on the online answer site. will expand on these deals, planning to announce four new partnerships in January, Magee said. She declined to say which companies the partnerships will be with, saying only that they related to providing tax advice.

    Launched last year, connects consumers seeking advice with self-described experts via email, telephone or instant messaging. Experts are free to set their own rates, but charges a 20 percent fee to experts who use its service. has raised some $60 million in venture funding, most recently in a $33 million third round in June. Among its investors are Ask Jeeves, MeVC Draper Fisher Jurvetson, Bessemer Venture Partners, and CMGI@Ventures.

    The layoffs at are only the latest setback for a CMGI-backed company. Last week, CMGI shut down its iCast entertainment site. The incubator, which was hit last month with a slew of downgrades from Wall Street analysts, has also made plans to close free Internet service provider and has overseen the recent closures of, and Productopia.