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Federated Media announces layoffs, shift away from display ads

The ad network firm founded by former journalist John Battelle lays off off seven of its 90 employees but plans to make more hires in its more lucrative marketing division.

The ax has fallen at Federated Media Publishing, the online advertising company founded by former journalist John Battelle. Seven of the company's 90 employees were laid off Friday.

The layoffs, according to a company representative, were almost exclusively on the display-advertising side of the company. Federated also creates interactive marketing campaigns, and with the display ad downturn in full effect, that's where the company has chosen to focus. Federated doesn't plan to ignore display advertising, but hope to make several hires on the marketing side.

"Given our journalistic heritage, we don't want to bury the lede: Today FM is restructuring parts of our business, and as a result, we are saying goodbye to a small number of our employees," a post by Battelle on the company blog read. "Also as a result, we are adding several positions in strategic areas where we see growth in the coming year."

In April, Federated Media raised a $50 million investment round led by Oak Venture Partners. The company serves ads on many of the Web's most popular blogs, like Boing Boing and TechCrunch, but it's had some high-profile losses over the past few years. In 2007, the company lost its display ad contract for aggregator Digg to Microsoft (though it still handles sponsorships), and tech blog network GigaOM left Federated Media for IDG last year.