Federated Media has built their reputation for providing blogs and other content websites with high CPM display advertisements. However they have lost several partners through acquisitions or by others leaving voluntarily. Ars Technica was with FM before they got bought out by Wired. GigaOm switched from FM to IDG. And Microsoft even poached an advertising deal with Digg.
In June 2007, Federated Media took some heat for making bloggers recite a Microsoft slogan in several conversational campaigns. Valleywag exploited the bloggers for doing this. Founder of Federated Media John Battelle wrote that he wished all of the blog authors disclosed that they had a relationship with the advertisers. TechCrunch author Michael Arrington wrote that FM Publishing threw bloggers under the bus for writing that statement.
Ever since those times, the U.S. economy has been in a struggling economic state which led FM Publishing to question their current marketing practices. Basically FM Publishing wants to displaying more engaging advertisements rather than just display ads. Even though they are cutting some staff, FM Publishing will be expanding the Strategic Programs and Major Accounts divisions.
[via FM Blog]