Questia Trims Even Further

Questia took another step backward last week when it laid off 40 employees, including Linda Cunningham, the Harper veteran who worked closely with publishers. The student-oriented Web site now has only 28 employees. As recently as eight months ago, it had 10 times that number.

The company, which had raised more than $150 million in three rounds of financing--including a significant investment from former Enron CEO Ken Lay, who still sits on the company's board--announced in November its intention for a fourth round, but the company has been unable to secure new investors. Subscribers also remain a problem for Questia--some insiders put the figure at no more than 5,000, though Questia says it is higher. The company says it will continue with "very focused" marketing efforts.

Cunningham, who was brought on because of her publishing contacts, set up a New York office when the company launched. That office is now closed and the function relegated to Houston, where CEO Troy Williams will "take a more active role." Others known to be leaving include spokesperson Ann Brimberry.

Despite the grim news, the company tried to keep its chin up. "We are confident Questia will ultimately be successful," said spokesperson Helen Wilson, who pointed to possible new investments and lowered burn rate as reasons for the optimism.

The news, first reported in the Houston Chronicle, also had the site renegotiating long-term contracts, but Wilson maintained that the company "will honor all obligations."

The one area the company does not seem to be struggling in is content--the site boasts more than 70,000 titles.