In a major business development, Engage announced that parent company CMGI has cancelled $60 million in debt owed it by Engage and transferred all of its holdings in Engage back to Engage management. As a result, Engage no longer carries the massive debt that had so heavily hampered its progress in recent years, and CMGI's stake in the company will be reduced to less than 10 percent. Engage paid $2.5 million to CMGI for 148.4 million shares.

Engage also appointed John Barone president and COO and Lisa McAlister as CFO.

On the product front, Engage announced version 2.0 of its PromoPlanner tool, a completely re-architected version that supports Adobe InDesign and offers better layering to facilitate changes in multiple versions.

Our take. Changes had been anticipated in the Engage-CMGI relationship, but few could have dreamed it would have worked out so well for Engage. This removes a huge albatross from the company's neck without and more major organizational changes and allows it now to stand on the merits of its considerably powerful catalog and ad software. However, Engage is not out of the woods yet. Its revenues must increase over the next year or the organization will continue to shrink.