Omnicom announced this week the closing of Agency.com. They are dividing up its businesses and merging them with other Omnicom units like TBWA and its sister unit, production services shop E-Graphics Worldwide. This is a good thing.
The name alone should have been retired
"Agency.com" tells you in the most generic way possible "this is a digital agency". It also sounds a little out of date. When Chan Suh (pictured at right) founded Agency.com in 1995, the name made sense. Since then, however, even Publicis rebranded Modem Media as "Publicis Modem" which if it didn't sound like a Latin phrase would evoke ancient 20th century technology. Who uses a modem anymore? You might as well start an ad agency called Black Rotary Telephone.
Digital has evolved into much more than web sites
The ".com" suffix describes a company that came of age when most digital work was the creation of websites. Agency.com didn't seem to develop a reputation beyond that kind of work during most of their tumultuous history. Their biggest recent achievement was the 2009 revamp of Skittles.com. The world doesn't need an agency specializing in websites anymore, because people (read: consumers) engage with brands via many other vehicles such as social media.
The race to the middle has many courses
To that point, new breeds of digital agency have sprung up, some with highly specialized capabilities (Reprise for SEM, Ansible for mobile) and others with broader, evolving capabilities (R/GA, Digitas). As Forrester pointed out in their survey of digital agencies last year, many of these have distinct orientations, i.e. some are more analytical, some more focused on writing code, some more focused on creative, et cetera.
Closing Agency.com is a good thing
It seems Agency.com had solid skills in digital production, because many of their people and assets are being merged into Omnicom's production services companies. This makes a lot of sense given holding companies' move into the production business.
It's worth mentioning that Omnicom rechristened Agency.com San Francisco as "Signal to Noise" and according to Adweek it will "operate as an integrated marketing company."
So: The name was old. The business model was old. The work, and the people, live on in different business units better suited to their talents. And that's a good thing.