Search engine startup Wink has offered to buy back stock from investors with remaining cash at a rate of fifty cents on the dollar, according to sources involved with the company.
The company has raised two rounds of financing totaling $7 million to date. Our understanding is that some of the investors have elected to sell their stock back to the company under these terms. Wink’s main investor, Greylock, reduced it’s stake in the company but remains its largest outside shareholder.
Wink’s plan will be to consolidate it’s remaining cash and focus on its people search engine, launched last fall.
We’re hearing two versions of why this is happening. The first version, coming from disgruntled shareholders, is that the company has failed to execute and it’s time to return what’s left of the capital to investors. The other story, being pushed by the company, is that they simply made a strategic decision to change the direction of the product, and offered investors a way out since it isn’t the story they originally bought into. Both are probably partially true, although it’s clear that a liquidation couldn’t be forced unless Greylock was behind it. And Greylock, even though they’ve sold some of their stock, still seems to be backing the company.
Odeo was also recently bought back from investors. In that case, the company was taken completely private and outside shareholders were reimbursed 100% of their initial investment. That looks to be a brilliant decision by founders Evan Williams and Biz Stone. While Odeo has since been put up for sale, Twitter has exploded with growth and has hyper buzz.
Will Wink also be successful? That’s for users to decide. But organizing the mess of human meta data included in the big social networks could be a smart way to go.
I could that being pretty interesting, although I hate it when people find out where my MySpace is and suddenly start talking to me about a blog or some dumb thing I wrote. Unfortunately, it’s a decent idea and someone will do it, might as well be wink.
Between them and Zabasearch I’ve nowhere left to hide.
And they have the perfect domain name too. Did I mention its 4 letters?
Search seems like a hard business despite how shitty google now is. I guess branding/distribution now wins out over technology.
The Wink guys are some of the nicest in the business, they’ve got that going for them. That hummer is ridiculous but hey, they are cool cats. Best of luck to them.
Sell the Hummer! Sorry, that was too much. Good luck guys! Wink has some of the nicest people in the business.
I think it is a smart move, and Michael is a very smart guy who has founded and exited two companies successfully. Sometimes the deal dynamics just don’t make sense for both sides; investors and entrepreneurs alike have to evolve their strategies. It sounds like Wink is focusing on the more important aspect of its business and some of its investors want to move on instead of doubling-down on the new strategy. I am glad that they were all able to work something out.
Alaska (#3) is correct, search is indeed a hard business.
I find it even harder to understand their new focus when a “People Search Engine” such as Pipl is showing results from social sites AND many other sites.
Michael — just a note that I need to send as I see this in all of your posts:
it’s = it is
its = possessive
>>
I read techcrunch often, but it disappoints me when you use punctuation incorrectly. “It’s” is only appropriate as a contraction between “it” and “is”. “It’s a disappointment” is a good example of its correct usage. As it were. You are a well-regarded journalist, come on now.
Bill - get over it. This is a blog. I write fast and I don’t have an editor.
Thats OK Mike. I dont think most TechCrunch readers worry much about it’s punctuation.