Euro RSCG Interactive 'rightsizes', restructures

By , agencyfaqs! | In | May 05, 2001
Euro RSCG Interactive is restructuring itself. It is learnt that Euro Interactive is moving toward small core teams and greater outsourcing

Euro RSCG Interactive, the nearly two-year-old subsidiary of the global advertising group, is restructuring itself. The company chief executive, Probir Roy, refused to answer any questions. "It is a competitive market and we are the flag-bearers. The information you are asking for is sensitive and anybody can copy us," he said. However, a senior executive affirmed that restructuring, or "rightsizing", in his words, is on. "We are adapting to market conditions," he said. "But which company isn't doing this?"

What triggered off speculation about the health of Euro RSCG Interactive was the exit of a senior executive (last month), who was asked to leave with a three-month salary package. Euro Interactive's Bangalore office is, for all practical purposes, closed. "The south wasn't remunerative for us," recalls an old-timer. The head office in Mumbai, it is learnt, is functioning as a lean marketing machine, along with a slim marketing set-up in Delhi. "The business model has undergone a change," says a senior source. "You have to keep changing in a market that is not so well-defined."

It is learnt that Euro Interactive is moving toward small core teams and greater outsourcing. A close associate informed that Euro was in talks with a company by the name of Webmoney India for a strategic alliance. Webmoney has a web presence in the form of Roy, when asked about this partnership, refused to either confirm or deny it. "We have partnered with various companies even before, like TCS. We built a team over a period of time. Then market conditions changed, and there are other ways to produce or deliver our service. We have to choose the best option," says an insider. In the current scheme, Webmoney may be executing projects for Euro Interactive.

Euro RSCG Interactive was started in July 1999 to offer the gamut of Net-related services right from strategy and consulting to design and software development for Indian corporates. It was unlike mediaturf, a Euro RSCG investment, which acts as both an ad-server network and helps companies market effectively on the Net. In a Financial Express interview in October 1999, CEO Roy had defined Interactive's core expertise as "branding and providing integrated marketing communication". Roy, whose dynamic career graph includes postings at Nuclear Power Corporation, Star TV and Euro RSCG, became the first CEO of Interactive. His immediate goal, according to the same article, was "to break even by July 2000 (one year)."

Last year turned out to be a blessing for all dot-com consultants. Trikaya was planning to launch Trikaya Grey Interactive. TBWA-Anthem expanded operations of its Interactive division into two more cities. Euro Interactive, under Roy's leadership, had grown to claimed billings of Rs 2 crore. It managed to do work for respected international clients like Mercedes-Benz and Davidoff cigarettes. Euro Interactive was being portrayed a leader in the business press. As the dot-com bust began, things began changing at most interactive set-ups.

It is difficult to get a fix on the precise reasons for the turmoil at Euro Interactive - due to the company's silence. Euro's CEO Ishan Raina was unavailable for comment, said his secretary, citing Raina's oveseas holiday. But one thing is for sure: Net businesses are asking themselves some really tough questions today, what with alliances like mediaturf-media2india, and talks of others following suit. The exact outcome of the restructuring currently on at Euro Interactive will become clear only around June, says Roy. "That is when we can speak," he said.

© 2001 agencyfaqs!