Rubicon Project is to cease providing intent marketing services and will close its Toronto, Canada office, instead opting for a partnership with fellow adtech outfit IgnitionOne, after the services division, which it forked out $122m for in 2015 by way of its Chango purchase, failed to meet expectations.
An SEC filing dated today (January 18) from Rubicon Project, confirmed the closure, claimed the intent marketing solution generated approximately $41m in GAAP revenue and $19m in non-GAAP net revenue throughout 2016.
It continued: “[It] was not contributing significantly to revenue and did not justify the associated costs. These actions will enable the Company to increase focus on growth areas, such as mobile, video, orders, header bidding, and the recently announced consumer initiative.”
Instead, Rubicon Project has entered an agreement with IgnitionOne to refer its existing intent marketing clients services, with certain employees who serviced those clients moving to IgnitionOne, with the pair agreeing a revenue share on any revenues generated from such services for two years.
The filing continues: “The company expects to complete this action in the first quarter of 2017 and to incur non-cash pre-tax charges consisting primarily of an impairment of intangible assets in the range of $8m to $11m relating to the company's customer relationships. In addition, the Company will incur approximately $0.5m in cash expenditures for one-time employee-termination benefits.”
Speaking at the time of Rubicon’s purchase of Chango, company CEO Frank Andante said: “Our combined capabilities will help to grow and innovate the $35 Billion intent marketing category while also fueling a rapid acceleration of Rubicon Project’s overall Buyer Cloud business, advancing our technology roadmap and team build out by more than one year.”
However, during the company’s latest earnings call (where it also announced it would lay off 19% of its total headcount) he conceded that it had failed to meet his initial expectations.
Since then the company has been reportedly exploring the possibility of a sale, with many speculating that private equity firms will eek to take the company off the public market.
Rubicon Project has since reacted publicly to the latest filing, with Business Insider able to sources a statement from the outfit, see link below.
Source: Business Insider