Former Keen and Cloudmark CEO Karl Jacob set high expectations for Wallop, a social networking site that hoped to sell widgets to users rather than showing them ads. Valleywag liked Wallop because it let you physically drag losers out of your social circle. But Wallop never made it out of beta. The site now says it will terminate service on Thursday. TechCrunch reports that their email to the company's press contact bounced — that's all, folks!
The boom in online ad networks, those automated brokers of discount banners patronized by websites desperate for quick cash, is at long last turning to bust. And the shakeout couldn't have started with a more deserving company. Amid lawsuits and layoffs, Heavy.com has seen two-thirds of its once-15-strong salesforce leave, a source familiar with the company tells us. Meanwhile, the company is trying to sell its Heavy.com, a video destination targeted at young men, so far without success. The plan is to focus on its porn-friendly Husky ad network. Who's to blame? Recently hired "grownups," says our source.Heavy has never been a particularly reputable company. It used to inflate its traffic with popup ads. Yet it still managed to raise $20 million in venture capital in January 2007. By last fall, investors began to clamor for more revenue. The startup's management then brought in what our source calls "C-level grownups." The hires included CMO Eric Hadley from Microsoft; CTO Scott Penberthy from Photobucket; CFO Todd Sloan from Nielsen; and VP Richard Rocca, who spent a few months at shady ad network Glam Media after leaving the equally unsavory ad startup Gorilla Nation. That crew now runs the company, "but the problem is there's not going to be anybody to run it with them," says our source, who calls the new leaders "ineffective."
With tyrannical founding CEO Jason Goldberg gone, Seattle-based Jobster is looking to replace departed CTO Phil Bogle. Rather than use its own job-listings product, the company has contracted a headhunter to make some calls. Meanwhile, they're letting go of less senior employees from departments like sales — leaving an office space in a waterfront building that can reportedly hold 200 with only 15 employees, nine of whom are executives and admins and six of whom are engineers. Oh, but it's hiring more, with the money new CEO Jeff Seely managed to raise in a $7 million fourth round of funding. Even with that infusion, Jobster can't be long for this world.Jobster gave away much of the farm when it raised its third round, way back in 2006. The $18 million third round brought the total raised to $48 million, but on a valuation only a little over $100 million — meaning there's probably little equity left to sell to investors. The $7 million secured in April was likely a "down round," or offered on an even lower valuation. Investors were probably looking to snap up what equity was left and keep the company going for just long enough to sell to someone. Anyone. Please. But if they're trying to cut the burn rate through layoffs, why is the company maintaining such a large office on the sixth floor in a prime Seattle location looking out over Elliott Bay? Our source was incredulous. "This makes no sense to me at all. No matter how good a deal they have, office space for 20 people would cost less on a cash basis." Maybe as a showpiece for possible acquirers? If that's the case, I'd take a cue from when the Mariners played in the Kingdome and the upper deck was always empty — cover the empty cubicles with a festive covers and bunting to keep it from looking like a mausoleum.
The bankruptcy of Flagship Studios, an ambitious videogames startup, provides a startling example of what not to do when it comes to finding funding for your startup. The company, founded by CEO Bill Roper, formerly of the Starcraft team at Blizzard North, leveraged the intellectual property rights for its two games, Hellgate: London and Mythos, as collateral in order to secure loans to keep the company afloat. When the company finally ran out of that money, the two core projects immediately reverted to the lenders, Comerica and HanbitSoft, respectively. HanbitSoft, a Korean company which had the exclusive rights to market the games in Asia, ended up in a position where it was in the company's interest to let Flagship go under: Why pay licensing fees when you can own the game outright after the owner goes under?
PodTech, once described by Valleywag emeritus Nick Douglas as "the video podcast network apparently dedicated to screwing over as many people as possible without actually profiting from it," will be sending out a cheery press release touting its acquisition as soon as today, I've been told. The company has also been meeting with potential clients who are being told that the company's just fine, thanks. Except what did the acquirer buy? Not inexplicable geek celebrity Robert Scoble, who decamped for Fast Company months ago, and was the company's only real, if questionable, claim to fame.
Could 2008 be the year that Hollywood has waited for so long, when that "indestructible cockroach" of independent movies-New York's Harvey Weinstein-finally runs out of luck? Forget about disappointing revenues from movies such as Quentin Tarantino's Grindhouse; one should be looking at the plight of a boring home video distributor which was supposed to be the Weinsteins' salvation.
An Akimbo employee detailed the twists and turns in strategy at the now dead startup, mostly from the point at which Tom Frank (pictured) took over as CEO. Frank stalled development on content for investor AT&T, killed a product a month after it was shipped to Novato-based Sonic, switched products on client CenturyTel with two months notice, then decided they needed to acquire Canadian startup iWave's software. Only after founder Jim Funk left, along with legions of engineers, did executives decide to resuscitate tech built in-house. The nail in the coffin?
With constant staff turnover and an eviction from its offices, at this point it would be more surprising if Red Herring managed to put together an event at all. Its Canadian startup showcase was originally scheduled for this week; citing a conflict with a Canadian venture-capital conference, the Herring moved it to June. Publisher Alex Vieux missed a poorly attended "introductory cocktail" party for the event in March; his staff put his absence down to a missed flight connection. Now the event has been rescheduled for September — the same month as the Herring's hastily postponed wireless conference in Beijing, and its Asia conference in Hong Kong. Vieux will have plenty of opportunities to miss flight connections — if any of the events happen at all.
Akimbo, the online video company that just laid off most of the staff, has finally closed its doors. Its failure comes only months after a fresh infusion of $8 million from investors, including AT&T. The telco giant was looking for Akimbo's content to fill out the company's HomeZone TV offering. Only problem? Akimbo lost all its content licensing deals, according to a tipster. [VentureBeat]
Alex Vieux's Red Herring isn't just poorly managed; it's unlucky as well. I just got off the phone with Vassil Mladjov, CEO of Blogtronix, the blog-software company which hosts RedHerring.com. He blames the site's outage — which comes the same week as the Herring's eviction from its offices and the cancellation of a Herring event in China — on a bug involving log files, and says the site will be back up shortly. Mladjov adds that unpaid bills aren't the issue; Blogtronix arranged to get paid through a barter deal.
Red Herring's magazine has not been regularly printed in ages. Today, its its website has been displaying error messages — not that readers are missing much of the understaffed RedHerring.com's output. Herring's conference business alone has been sustaining Alex Vieux's rocky tech-publishing empire. But that, too, seems to be falling apart. A commenter has posted what he claims is an email from Vieux announcing the cancellation of next week's Red Herring Wireless conference in Beijing. At first it struck me as ludicrous that Vieux would cancel one of his cash-cow events. But I called the host hotel, the Ritz-Carlton Beijing, and staff there confirmed that the event was off. Vieux's email cites "difficult personal family health problems" as the reason. If true, it is most unlucky for Vieux that these health issues just happened to coincide with an eviction from Herring's Belmont headquarters.
A call to Red Herring publisher Alex Vieux through his old office line, 650 428 2900, was answered today by a man with an Eastern European accent who said Vieux wasn't there. Why was anyone there to answer the phone? Yesterday, the Herring's landlord sent a locksmith, an attorney, and sheriff's deputies to evict Vieux from the building, prompting a hasty exit. Vieux claims he has a new office, but wouldn't give out its address. If so, it's possible Vieux had the phone line forwarded there. But it's also possible, a former employee says, that Herring employees broke into their former office: "I wouldn't be shocked if Vieux & Co. just went in through one of the side doors that is not well secured." Wouldn't that be trespassing, though?
The news of Red Herring's eviction from its office has not given the Valley's PR machine even a momentary pause. At last count, 89 press releases have hit Google News touting some startup's listing on the Red Herring 100 North America. What none disclose: Whether they paid Red Herring to be included on the list. Several companies have told Valleywag that publisher Alex Vieux emailed them after naming them as "finalists" for the Herring 100, suggesting that they buy event tickets or pay for a promotional video. Vieux's landlord must be flabbergasted that despite these surely lucrative quid-pro-quo awards, Vieux still wasn't able to pay his rent.
The delusional Alex Vieux's powers of spin are prodigious. He has characterized the eviction of Red Herring, his tottering tech-publishing enterprise, from its Belmont office to News.com as an "economic decision." An economic decision which involved a locksmith, the landlord's attorney, and assorted sheriff's deputies. Normally, working out a rent dispute doesn't require officers of the peace. Were Vieux to be convicted of a crime and jailed, would he describe his sentence as a "period of voluntary seclusion"? (We speak theoretically, of course.) He also told News.com that he had secured a new office, but would not say where it is.
Location-based social network tool Meetro is closing the doors. In the goodbye letter founder and CEO Paul Bragiel explained how a small community of users in Chicago wasn't enough — the company couldn't get much penetration in the markets in New York or San Francisco, where services like Dodgeball and Yelp have acquired large followings (though Dodgeball has since withered and Yelp isn't huge outside of the Bay Area). And the fact that users had to download software didn't help. But hey, one of Meetro's execs met a girl:
Red Herring, the once-storied, now marginal tech publisher, was evicted from its Belmont office at 19 Davis Drive at 3:04 p.m. today, a spokesman for the San Mateo County Sheriff's office confirmed to Valleywag. This is a phenomenal comeuppance for publisher Alex Vieux, who has heretofore displayed an amazing ability to dodge creditors and talk his way out of paying bills. We're told that employees left through the back door and gathered in the parking lot, hoping that the sheriff's deputies would not confiscate their laptops, too.
Until a recent article from ReadWriteWeb declaring online file-storage and sharing service Omnidrive dead, founder and CEO Nik Cubrilovic was missing in action. The support forums for customers went unattended even as the site went down. An investor, Clay Cook, who sunk six figures into the company couldn't get a reply to his email. Also nowhere to be found? Any reporting from TechCrunch.
