Seems like widget distribution startup Clearspring is another victim of the economic meltdown forced to make some tough decisions. We heard rumors floating that the company laid off about 20% of its staff in early December, and we’ve now confirmed with Clearspring that several people have in fact been let go, although they’re not sharing the exact amount of firings. CEO Homan Radfar says:
Late in Q4 last year, we decided to reduce our workforce. Even though we had a great year with tremendous growth, the economic uncertainties caused us to lay off colleagues. I am sad to part with them
Worse, the company has to find a replacement for President and COO Jay Rappaport, who joined the company in April 2007 and brought a lot of experience in-house as the ex-President of Vonage and former COO of AOL. We’ve added Clearspring to our Layoff Tracker.
There’s no doubt that Clearspring is being hit hard by the financial crisis, and since its business model is based primarily on online advertising its prospects are probably going to get worse before they get better.
Don’t count out Clearspring just yet though. They might be trimming down for tough times ahead, but with total venture investment in the startup at $36 million, with $18 million raised in a series C last May, they may very well have enough cash to weather the storm and come out stronger on the other end.
Your Layoff Tracker list seems to be getting longer by each passing day!
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It’s to bad people are losing their jobs (anywhere) but c’mon…widgets? How many people even use (or need/want) them?
…$36 million dollars and still not enough for whetever their grand vision is/was…wowza…
I think you are correct in stating that widgets are irrelevant now, but I truly believe that they will play a very important role in the next iteration of the internet. The problem is that currently, no one knows how to use them correctly. Large companies get sold on these branded widgets to support their larger online campaigns, but consumers don’t want that. A branded widget doesn’t add to the conversation, it just sits adds noise and acts like a banner ad. If they can survive, companies like Clearspring will be at the forefront of providing tools for mainstream internet users to leverage widget technology to create truly meaningful and useful tools and online experiences.
I mean, the idea of widgets is sorta neat…tiny, standalone apps that do simple things like checking weather, showing your stats on a website, being a clock, etc. but I just don’t see how you can monetize it. I mean, if you started slapping a logo on every widget or something people would find a non-branded/open-source version instead. Computer users are goody like that.
Also, there’s not a real purpose they serve beyond being something “different” to play around with. Like the whole “virtual worlds” craze in late ‘06/early ‘07…I mean, maybe 10-15 years now it’ll be more useable…but for now, it’s much easier to email or IM someone than try to meet them in a 3D virtual environment.
I just really wish all these gimmicky small-fry web companies would stop popping up. You can’t monetize everything (and even big things/trends aren’t immune to this *Youtube*) and in the tech world, offline or online…if your app/product/service doesn’t make computers users’ lives easier or better in some significant way, not only will they NOT use it…they most certainly won’t ever pay for it.
Sprout, a similar company to Clearspring, also laid off a large number of its workers/contractors in December. Seems like the widget world is slowly coming to an end.
Intersting News,
but with that large pockets we should see upside momentum at the end of 2009 for them.
In Europe we see the same down scaling as we offer a lot less Jobs on http://www.Spirofrog.de in these days.
But the downturn will Stop mid 2009 IMHO
Widgets? Business? Surely not…
Feel for anyone doing it tough, but, c’mon – widgets? Advertising supported? That’s got to be as attractive as collateralized debt obligation backed by WuMu and Lehman…
you know what would be interesting? a partner to the layoff tracker showing new company growth figures. then we’d have the two sides of the coin, and the net growth/shrinkage of the industry. obviously right now would be pretty negative still, but we’re only getting part of the picture.
What we need is a layoff tracker widget for Opera, FireFox, Desktop and iPhone…
Yet another object lesson in interpretation for you to use when leadership says they’ve had “a great year with tremendous growth.”
Probably not the best forum for this but none of my peers are as knowledgeable about web startups as folks on this blog. I read day after day about these web startups getting millions in VC money and\or get bought by other companies for huge sums of money but from what I can gather very few are even profitable. Most don’t seem to even have a business model that suggests profitabily. I don’t understand this.
Another reality, I think is that the primary appeal of the internet is the availability of free services\content. Once you start asking people for credit card or paypal payments web users simply go elsewhere (excepting porn and dating sites). So that leaves advertising as the only revenue model. In all my years on the web I have never ever clicking on an online ad all the way through to a completed purchase transaction.
Day after day I read about all these little tools to help manage your contacts, blog feeds, Social Network info etc etc. Are significant numbers of web consumers ever going to be willing to pay for this stuff? Other than stuff that directly helps businesses make more money or the before mentioned Porn and dating sites are people ever going to be willing to pay for web based services\content? 36 million for a company that distributes widgets? Huh? Once advertisers wise up and realize no one is buying stuff as a result of their online ads how are these companies going to survive?
I think this company along with RockYou and Slide will all go out of business.
What business isn’t hurting? And I thought it was supposed to be prudent to downsize in a recession to reduce the burn rate. Widgets are here to stay. Yahoo, Intel, Samsung and Sony (among many others) are unveiling “The Widget Channel” at CES on Thursday. The iPhone app store is comprised of at least 50% applications that are basically widgets.
They are going to be everywhere and while many will utilize sponsorship and advertizing to monetize, there are thousands of day to day uses for widgets. it’s all about utility. If they provide some form of usefulness to a person, they will be kept and reused.
It’s an absolute catastrophic meltdown of biblical proportions in the financial marketplace. We may not see same the type of money flowing environment for YEARS! Companies have to be trim down now and become really really lean to make it right now.
That’s too bad, considering they were one of the leading widget people. Maybe if they had stuck with one advertising billing model for more than 2 months…
Widget ads are nothing more than rich media banners with a “grab this” button.
My guess is Pointroll and Eyeblaster will each gobble up a widget maker to extend their rich media ad serving reach (probably Clearspring, Slide or Gigya) and then we’ll get to deal with lack of advertising spec standards for widget ads across social network sites. The rest will go out of business, just like when Eyeblaster, Pointroll, and Unicast trounced their rich media competitors in the early 2000s.
And then AOL goes out of business. Oh, wait…
I think one thing most people are missing is the why. Why have widgets become so popular? Why are widgets seen as viable points of advertisement? Why is Clearspring simply cutting costs instead of folding outright? Why would VCs even considering investing their tightened capital into this space?
The answer is that the web is changing. Yes, the web became popular because of an apparently inexhaustible source of free content, primarily information and entertainment. The difference now is that the use of the web is not simply logging in to an ISP and and surfing sites with your browser.
The web is now comprised of multiple points of contact and access for any given individual. A company that simply focuses on a single point of presence for their content cannot reach the percentage of web users that it would like, nor can they fully leverage the ever-widening social nature of the internet.
These dynamics create a need for distributed content and virility. The primary targets for widgets right now are high-concentrations of eyeballs that are highly social and like to share content (e.g. Myspace, Facebook, etc). However, this distributed content can be pushed/pulled to your mobile device, your web browser, your computer desktop, your television, your set-top box, your gaming console, your watch, your ATM and within the next decade or so, the tabletop at your favorite restaurant.
I think many people see the content, but fail to understand the value of the underlying user network, infrastructure and toolsets required to facilitate this new digital media model. The companies that dominate this space early on could potentially change the face and scope of the internet as we currently know it.