While some companies have the ability to hire investment banks to help them sell themselves (see Grouper and Napster for recent examples), eBay is proving to the be liquidity path of last resort for many struggling web startups, or those that simply want to sell out for a few hundred thousand dollars. We’ve tracked at least six “web 2.0″ companies who’ve attempted to sell themselves on eBay over the last year, and four of the six have been put up for sale in the last month. As an aside we also noted a Digg user profile that sold on ebay for $822 in July 2006.
The chart to the left shows some of the relevant auction data, including sale date and price if a sale was closed. Three (jux2, DigForIt and Kiko) sold, two (Madhens and Huckabuck) didn’t and one (Crispads) is still pending with no bidders and a $90,000 minimum price.
Zookoda, an Australian email marketing and services company, is next up. The current service launched on March 13, 2006 and version 2 was covered on TechCrunch on its launch in May. The Zookoda.com domain name as well as the related service (source code, images, blog, partner website, admin website, database, server and documentation) is up for auction, as well as consulting time for the transition. Unlike the six companies above, however, Zookoda is holding a direct auction outside of ebay so that, in the words of co-founder Nick McNaughton in an IM conversation we had earlier, “we can have some control over our own destiny and make a considered decision on an appropriate partner.” In other words, Zookoda will have the ability to choose a partner outside of the normal eBay rules - they will not have to sell to the highest bidder and can consider things like equity/cash combinations, choose a lower bidder because it’s a better fit, etc.
More information on Zookoda and the sale is here. Expressions of interest are being gathered from September 25 through October 6. Interested parties will have an opportunity to conduct due diligence on the service, and final bids must be received by October 13. To indicate an interest in the auction, go to this page.
Nick won’t say what their minimum price is, but given that Zookoda has over 5,000 passionate blog customers and an extremely feature rich service, there will be at least a few interested parties.
Comments
Blogster.com sold for $100,000 on eBay last December.
Although placing your site up for sale may be a sign of struggle or even failure for many projects, I’d urge everyone to keep in mind that this is definitely not always the case.
Some developers are more interested in an idea-to-sellable-prototype model with quick turnaround, instead of being tied down to long-term site maintenance.
Interesting, these webs apps are be sold as quickly as they are being created. Who is next ?
From their announcement:
“As such - NOTHING WILL CHANGE for at least a couple of months. During this process we will continue to communicate with you via email and here at the Zookoda blog.”
Actually, any communication from Zookoda would be a rather dramatic change.
IMO, these guys fumbled a great opportunity. In early June, the service stopped working well for me and customer service was too busy doing other things to care - like getting the shop ready to sell.
While I think Tom’s right - these guys were more interested than doing their “next” thing than “this” thing, if you can’t deliver what you’re proposing to deliver, you have an obligation to tell your users.
So they found a way to get rid of their ‘full featured’ and fully buggy system. It may be a good news for their remaining ‘free’ users. They may be fortunate enough to receive at least an automated response for their support requests or may have a chance to get copies of their mailing lists before system stops working for them (something that happened for me without any reason).
A friend of mine was talking about this not long ago. I think that’s hysterical, but I can’t fault small companies for going this route. It’s hard to get on the radar of the industry, it really is. But isn’t there a site out there that has this? I swear I read it not long ago in B2.0. I’ll have to go back and snoop around their archives.
I think Tom’s right. It seems to me that most of these companies/individuals are developing the sites just to sell for a profit. Looks like a new business model to me. What do we call it? Design/Develop to Sell - D2S model?
This kind of thing has been going on for a long time. Maybe not via eBay, but the idea of domain brokerage (?) has been here for a while. I remember seeing forums for buying and selling domains as well as full web sites starting around the time of the Dot Bomb. I recall seeing auction environments and web sites for this too.
Here are some references if you’re interested in this general topic:
WebSiteBroker.com
http://www.websitebroker.com/
Creabiz, Inc.
http://www.creabiz.com/
Developed Web Sites For Sale
http://www.allfordomains.com/sites.htm
…of course, none of these have much mojo or significance. At the same time, eBay isn’t really getting into this business. They’re just happen to have a ton of mojo so it is a (possibly) good place to sell a developed site. They have the traffic and users. eBay’s a cog.
The guys better be careful jumping on the web 2.0 bandwagon, or do they not remember the .com crash?
Honestly, I have stopped trusting startups and entrepreneurs for their *gaseous* behavior . Most of these companies are started by few guys who want to experiment with technology and of course, users (and their data)..
Wondering whether I should create a seperate email id while registering to such startups/companies? coz eventually all the user data will be shared with the acquiree and you never know what the heck they would like to do with your data..
sin.
iDea Labs
the idea of selling a firm via ebay is good specially for those who would like to exit asap.
maybe someone or a niche investment banker that focuses on tech start up should be available.
best,
htt://www.moblabber.com
Zookoda is an outstanding service. I hope they stay in business, doing the same things that they are today, with a new company that doesn’t change anything.
I love Zookoda, its an amazing service.. I hope it will always be free.. I have been using it, there are so many quirks and bugs, I hope will be fixed…
only the two people that work on it really understand it… so I think it would be better if the sale was postponded for a year or so…. I’m sure they would make more money that way..
“Design/Develop to Sell - D2S model?” what a nice term you’ve coined
the thing is, there are many start ups who try to kick-start their project, get some decent hits and then sell it for a good money. it’s ok when you have a lot ideas and a lot work to do, so you have to decide which projects to sell, in order to concentrate your time and new-big-money on the ones you choose to keep
or probably Build2Sell - B2S
A few readers may have been unduly harsh about why the founders have decided to sell their business. Stop for a moment to consider whether you’re really asking too much to sign up for free to a web startup and have that service continue unchanged and without growing pains. You want every email responded to in Should I acquire another business?Should I restructure my business?Should I sell my business?If you’re not asking yourself those three questions every time you run through your strategy, you’re not doing the right thing by your shareholders.
There are plenty of reasons to try and sell a successful business, including changes in personal circumstances, relationship issues between founders, and a lot of sound business practice - your startup may get a turbo boost by being added to a set of products onsold by the purchaser’s sales team, or plugged into a suite of products that already sells well, or taken to the next level by the purchaser’s experienced development teams.
Choosing to sell at auction isn’t always a sign of a fire sale, either. Auctions are the best way to efficiently value an asset, and auctions are used to reach a broader range of buyers than can be found through your own business network. It makes sense that a few guys working as hard as they can on the business might not have the broadest network of contacts to find potential buyers for a fairly niche business.
I use Zookoda for my own blog email feeds and I’ve experienced problems, but with patience and communication they’ve been resolved, and it’s never seemed to me that the guys at Zookoda were doing anything other than working very long hours trying to make the service better for me and other customers. I’d like to continue to use Zookoda once its in new hands, and I’d be prepared to pay a reasonable monthly subscription or include AdWords-style text ads in my feeds in order to do that.
I hope it pans out well for Zookoda and I’m grateful that I got to use such a cool service for so long, for free.
argh, i munged my 2nd paragraph. Undo! Undo!
If you used Zookoda, like me, this isn’t a surprise. Zookoda has been broken for months. I don’t remember the last time I got an my email from Zookoda. Lot’s of others are seeing the same thing. http://www.redferret.net/?p=7338 I switched to FeedBlitz, but that does not work either. I know its free, so I can’t complain, but does anybody know of newsletter service that actually works? And no, Bloglet is broken too. And no, I’m not giving my feed to FeedBurner.
Hi Brian:
Please write to support - we’ll get you going!
Phil
Brian, another alternate service is Rmail [http://www.r-mail.org/], which I run.
most of those bids are fake i bet
How about a followup post on this? What the heck is going on? The service is still not sold, it’s full of bugs that never get fixed or acknowledged, nobody responds to support requests. What do users have to look forward to? Months of limbo, with a sale down the line, after which more months of limbo as the new owner figures out the code and begins to catch up with maintainance?
Great to see the domain market heating up once again. Lot of high priced sales popping up dnjournal these days.
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