Spokeswoman Linda Gamberg said the layoffs were among "measures to preserve cash to carry us into 2002." Launched as a political empowerment site, Grassroots.com now hopes to sell software and services to customers interested in tapping the Internet for political action.
Other online companies have made layoffs as they struggle to focus their agendas around political groups or activism. In February, Voter.com shut down, just three months after it laid off more than 10 percent of its staff. Analysts had predicted that few political portals would survive past the 2000 presidential election.
"I don't think there's a lot of hope for political Web sites to make a profit," said Sonia Arrison, director of the Center for Freedom and Technology at the San Francisco-based Pacific Research Institute. "If they frame themselves as nonprofits, they might have a chance in getting a donation from their core people. As profit-making ventures, I don't think they have any hope at all. They fit in with the dot-com that really had no value."
Arrison said that the problem with political Web sites is that they're only useful during a campaign.
Grassroots.com was first launched in September 1999 as place where people could take political action online. The site provided voters with downloadable video footage of candidates' speeches and chatrooms; it also ran online services for candidates aiming to raise money, recruit volunteers, and motivate last-minute voters.
Gamberg said that the privately held company discovered that content destination sites were not going to be a "viable revenue generator." As a result, Grassroots.com shifted its business model last May to sell software to organizations, such as trade and labor unions and nonprofit organizations, that need the tools to "empower large memberships and organize them around lobbying and issue advocacy."
In November, Grassroots.com tapped McCurry to head its business.
"We have politics still in our mission; it's definitely still in our blood," Gamberg said. "Unfortunately, we realize?political content Web sites weren't a viable commercial business model, and that's exactly why we started taking those steps to transition into a software development company long before the elections."
Grassroots.com said that although its revenue stream has been coming from the sale of its software products, it also hopes to launch new products focused on application service providers this year.
Pacific Research Institute's Arrison said, however, that online companies providing software services for political groups may find themselves in the same trap as other political destination Web sites because such software services are only useful during a campaign or proposition campaign.
"The Internet is useful when a direct action has to be taken quickly," Arrison said. "But in times when that's not necessary, which is most of the time, (political-oriented Web sites) are not needed."