Youth oriented Internet radio station Spike Radio will be cutting costs and putting heads on the block after losing its main advertising contract.
Spike Radio has long since maintained that strong advertising revenues are partly what differentiated it from other Internet radio stations that failed to keep afloat.
"Spike Radio will not be able to continue to operate on a cashflow-positive basis," parent company Spike Networks said.
"In these circumstances Spike Radio will immediately undertake a substantial downsizing of its operations in Los Angeles."
In July 1999, Spike listed on the Australian Stock Exchange and not long after threw a lavish party in LA for the launch of Spike Radio.
Spike Radio claims it will not need a handout from Spike Networks, which has an 85 percent stake in its Internet radio arm, and that US$350,000 in cash and current receivables will cover the costs associated with downsizing.
Spike Networks said it is in discussions regarding a "potential repositioning" of Spike Radio's existing business and assets.
An announcement is anticipated by the end of the month.
