Avenue A Announces Cost Reduction Initiatives.

Business Editors

SEATTLE--(BUSINESS WIRE)--May 23, 2001

Avenue A, Inc. (Nasdaq:AVEA), a digital marketing services and technology company, today announced a cost reduction program intended to help the Company achieve profitability.

Avenue A, Inc. announced that it would immediately reduce its work force by 20%, or about 75 positions. This is part of a broader cost-cutting program in response to current softness in demand in its markets. It will take an earnings charge to reflect severance costs and other one-time expenses related to this cost reduction program during the second quarter of 2001.

The Company noted that the staff reductions will be felt throughout the organization. Avenue A, Inc. remains committed to investing heavily in its Atlas technology platform, which is scheduled for market release in the third quarter of this year, as well as serving the agency's top corporate clients.

Avenue A, Inc. is confirming its earlier revenue projections of $95 to $110 million for fiscal year 2001. The Company will shortly provide additional financial guidance relating to operating expenses and severance costs. At the end of the first quarter, Avenue A had $124 million in cash and investments.

About Avenue A, Inc.

Avenue A, Inc., the digital marketing services and technology company, was founded in 1997 to help marketers acquire, retain and grow customers across all digital media. Through its two operating units - Avenue A, provider of digital marketing services, and the new Atlas DMT unit, provider of digital marketing management solutions - Avenue A, Inc. seeks to be able to touch and bring value to any interaction in the digital marketplace. The corporation is based in Seattle and operates offices in New York, Chicago and London. Avenue A, Inc. also offers digital marketing services through iballs, a wholly owned subsidiary based in New York. Avenue A, Inc. and iballs adhere to the NAI privacy principles that have been applauded by the FTC. These principles are designed to ensure Internet user privacy. Please visit www.avenueainc.com to learn more.

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the opinions and estimates of the management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The forward-looking statements in this release include, among others, the release of the Atlas technology platform during the third quarter 2001 and expected revenues for the year 2001. Factors that could affect Avenue A's actual results include, among others, the potential failure to attract new clients, to maintain current, desired client relationships or to achieve effective advertising campaigns for existing clients, to achieve projected revenues and gross margins, delays in reaching profitability, insufficient funds to reach profitability, quarterly and seasonal fluctuations in operating results, fluctuating or declining demand for our advertising services, timing variations on the part of advertisers to implement advertising campaigns, costs related to any possible future acquisitions of technologies or businesses, the short term nature of Avenue A's contracts with clients which are cancelable on 90 days' or less notice, the fact that many of our clients have limited operating histories and are unprofitable and may not be able to pay for our services, the uncertainties, potential costs, possible business impacts of unfavorable rulings in the previously-announced class action lawsuit loss of key technology personnel and unforeseen problems with software development. More information about factors that potentially could affect Avenue A, Inc.'s results is included in Avenue A, Inc.'s Form 10-Q for the fiscal quarter ended March 31, 2001 filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, Avenue A, Inc. undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

Avenue A, Inc. has applied for registration of the "Avenue A" and "Atlas" service marks in the United States and other countries. All other trademarks, trade names or company names referenced herein are used for identification only and are the property of their respective owners.