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Organic, ad firm mull forging ties

BBDO Worldwide and its U.S. digital marketing division are in discussions with the Internet consulting company to establish a strategic alliance.

Advertising agency BBDO Worldwide and its U.S. digital marketing division, @tmosphere, said Friday they are in discussions with Internet consulting company Organic to establish a strategic alliance.

"We have known and worked with Organic for several years and share significant client relations," Allen Rosenshine, chief executive of BBDO Worldwide, said in a news release. "Digital media represents an important means for enriching customer relationships and delivering sophisticated marketing messages. We are hopeful that these discussions will lead to the development of even more effectively integrated marketing solutions for both existing and new clients."

New York-based BBDO Worldwide, part of Omnicom Group, is the third-largest global advertising agency network, with 323 offices in 76 countries. The agency reported global billings of $14.9 billion last year. @tmosphere clients include Visa, Cingular, Wrigley and the Financial Times.

The deal could lead to greater financial stability for San Francisco-based Organic, which was founded in 1993 as an e-business consulting company. BBDO and Organic share clients such as British Telecom, DaimlerChrysler, General Electric and Charles Schwab.

Organic rode the crest of the Internet boom in the late 1990s and early 2000, and its stock has surged as high as $38.50 during the past year. But Organic and other Internet consulting companies have fallen on hard times as the economy cools.

Organic, whose clients include Federated Department Stores, Tommy Hilfiger and Target, has seen its stock slide almost 40 percent since the beginning of the year and nearly 91 percent since its 52-week high. The company closed trading Friday at 50 cents, and said Thursday that it faces delisting from the Nasdaq Stock Market for its chronically depressed stock price.

Organic also said Thursday that it would slash about 300 jobs, or 35 percent of the work force. In December, the company eliminated 270 jobs.

Because of the layoffs, Organic said Thursday it expects to record a restructuring charge of approximately $17 million to $20 million in the first quarter to cover severance and other costs.

Organic is part of the laundry list of Internet consulting companies that have used layoffs and other cost-cutting measures to counter the dot-com shakeout and the downturn in e-commerce. Internet consultancy MarchFirst informed employees of layoffs Thursday, and Razorfish also made layoffs this month.