Two-way Sidewalk: Growth, layoffs
Microsoft's localized service is laying off three to four employees in each city that is up and running but is expanding its roster to 50 cities.
Right. It's the money.
And while in the past, some have thought that Microsoft would be too proud to admit it had taken some wrong turns on the information highway, no one is saying that now.
But the point on which observers have trouble agreeing is just exactly where Microsoft should go today to make a buck on the Net.
In the latest example of Microsoft's quest, today it announced that it will be expanding and contracting Sidewalk at the same time.
Sidewalk will be laying off three to four people in each of its ten cities that are operating or about to start operations. The service also will vastly expand the number of cities it serves to 50 and will be centralizing some of its functions, Matt Kursh, business unit manager for Sidewalk, told CNET's NEWS.COM.
While Kursh said the reorganization is about fine-tuning an already successful business model, analysts interpreted it many different ways. All, however, agreed on one point: the shift in strategy is about trying to increase revenues.
The layoffs mostly are aimed at business and support staff and not employees involved with editorial content, Kursh said. Employees were being told about the layoffs this morning. The move will leave each of the ten cities with about ten full-time employees plus contractors, he said.
At the same time, Sidewalk will be centralizing some of its functions, he said, declining to be more specific, and will launch 40 more cities by the end of the year to bring the total number of cities to 50. Sidewalk currently has nine live sites but is fully staffed and set to launch in Chicago. Kursh declined to give a launch date for the Chicago site, but said it would take place "soon."
The news of the layoffs, the centralization, and the expansion of Sidewalk confirms rumors that have been flying around the Net for several days. Acknowledging that Sidewalk has been "closed-lipped," Kursh said he wanted to break the silence by "coming out of our shell" and discussing the changes.
He was scant on details, however, saying he didn't want to alert Sidewalk's competitors such as CitySearch and America Online's Digital City of all the internal workings of Sidewalk.
In fact, Moody added that Microsoft is going to add features code-named "crosswalks" in which the company will create national classified databases linked to its transaction-based sites such as its online travel agent Expedia or car-purchasing site CarPoint.
The move would be consistent with Microsoft's overall shifting Web strategy. Microsoft has continually streamlined its online service, Microsoft Network, for example, to direct surfers to its moneymaking sites.
But just what is the "killer app" is a subject of great debate.
Bill Bass, an analyst with Forrester Research, says the bottom line is that the only winners in the localized content business will be newspapers, local television stations, and those who partner with them.
Bass's blunt assessment of Sidewalk? "They're doomed."
And advertisers have found that they weren't getting much bang for their bucks, Bass noted.
"I don't see a business model emerging in which Sidewalk will ever be profitable," he said.