Radical Communications Shutting Down

Radical Communications (www.radicalmail.com), a developer of rich media advertising technology announced on Friday that it was essentially shutting down after failing to secure a second round of financing.

Jay Stevens, director of marketing at Radical said that the company has "by and large ceased operations." He said that a core team of 12 employees remain to help explore a number of "M&A options."

"It's an extremely difficult time to raise money and we realized no one was really interested in funding anything," said Stevens. He said that Radical is still supporting existing clients and their campaigns, but would not take on new business. "There are six tech [employees] plugging away," he added.

Radical has had customer success stories in delivering audio and rich media marketing messages. Companies like Compaq, the NFL, Ziff- Davis, Sony, Microsoft, Lee Jeans and others have used Radical's Java-based streaming technology for marketing and other corporate communications.

The Java technology has been contested in court recently. In March 1999, helloNetwork filed suit against Radical for copyright infringement and related infractions. In December 2000, a federal judge in Los Angeles ruled that Radical was a licensee of helloNetwork's streaming audio/video software.

But Stevens insisted that the lawsuit had nothing to do with the company's financials troubles. "We have our own codec. It's important to note that Hello's codec was one codec we had," said Stevens. He called Radical's codec much slimmer than other codecs running under Java.

Layoffs at Hiwire, too

In other news, target ad company Hiwire (www.hiwire.com), announced it was laying off 24 employees on Friday. The company said it was close to getting an additional round of funding and the reductions were "deemed a necessary cost-cutting measure and will in no way affect the ability of Hiwire to serve ads, sell spots or enable new Internet radio stations."

Hiwire serves stations from Clear Channel, MusicMatch, NetRadio, Discjockey.com and Salem Communications, among others. In a statement, Warren Schlichting, CEO of Hiwire said, "Despite the staff reductions, our core team remains intact, ensuring that engineering, sales, marketing and business development will continue to function normally."