startups are facing the larger economic downturn. That more or less what the latest job-cutter, video site Break.com, tells CNET.
Yet, "[e]ssentially, we are profitable," chief executive Keith Richman adds. His company has gone from trying to be a general video-sharing site to entertaining a mostly male audience. "We have 80 people, are growing 100 percent year over year and still actively hiring for a bunch of jobs."
The economic downturn is also good time to cut employees who managers aren't happy with because of performance or whatever reason, other cost-cutting startups have told us. As TechCrunch phrased it recently:
A company that has made layoffs is branded a loser, and it becomes very hard to get positive press, recruit new talent and close new rounds of financing. Until now that is. Companies that have made layoffs in the last week are generally being given a pat on the back for being financially prudent.
Even YouTube says it hasn't nailed its big business model, but it has started offering new forms of monetization, like helping video creators directly benefit when their videos get uploaded to the site. Meanwhile, smaller rivals, like Veoh, have also been cutting employees while also planning to hire more.
Certainly, there is both a general shakeout happening in the online video sector, as well as troubles within specific companies as they readjust to face harder times. The advertising revenue that goes to most of these video startups adds up to millions, but not the necessary billions of dollars, as many of them have told me. Industry insiders on a recent panel I moderated said they expect a larger shift in ad spending from television to online video within the next one to ten years.