Investors in an early angel round included Jawed Karim (Co-Founder of YouTube), Kevin Hartz (Co-Founder of Xoom and Eventbrite), Joe Greenstein (Co-Founder and CEO of Flixster) and Keith Rabois (Former PayPal & LinkedIn Executive and Current Slide Executive). A later $2 million round was funded by Maples Investments and DE Shaw.

The company first launched as an online betting service and then changed its name and focus to social gaming. But on October 16 the company shut everything down with a brief note to users: “Dear dotblu members: dotblu.com is down indefinitely. A big thanks to each of you for being part of our community for the past two and a half years.” The note also asks users to stay in touch via their Facebook fan page.

Most startups die, so this isn’t any particular slam on the founders or investors. They tried and they failed, and that’s the way of Silicon Valley.

And as a goodbye salute to dotblu, I remind readers of The Man In The Arena speech by Theodore Roosevelt in 1910. Adapt or die, they say. And if you die, put another quarter in the machine and start the game over.

Thanks for the tip, Tinycomb.

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Unfortunately, all data that doesn’t get backed up by its users in the next ten weeks will be wiped out, although there is a simple tool that allows for easy export of all data and soon users will also be able to download a zip archive of their binary files (images etc.).

As to the why of the voluntarily deadpooling of Storytlr, co-developers Laurent Eschenauer and Alard Weisscher are not at all vague: they simply lost interest after deciding that the project could not be turned into a full-fledged company, and unsuccessfully trying to find alternatives routes or potential partners. And most importantly, lack of time:

The reason is simple: our lives have moved on, kids were born, house were bought, new projects appeared and we don’t have time anymore to operate this service properly.

We have spent the last months looking for alternatives, potential partners, and even thought about creating a startup around this project. Yet, in the end, nothing did really make sense for us and we have decided to pull the plug. It was a tough decision to make, it is a sad day, and we feel sorry for our passionate users who have put so much effort into their page and who have helped us improve the service through their many comments.

The two men are going to try to open source the whole thing, but are not willing or able to provide an ETA since it requires significant refactoring of code. Frankly, I wouldn’t hold my breath for it and check out alternative services such as Soup.io, Lifestream.fm or Sweetcron in the meantime for your digital lifecasting purposes.

As a farewell salute, here’s the probable highlight of the adventure for at least one of the initiators of the project: watch Eschenauer pitch Storytlr to Google co-founder Sergey Brin:

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The service was a useful one that allowed you to get an automated email with all your @replies and follower notifications from Twitter. But it would appear that the developer simply got fed up trying to build a new version while continuing to “fire-fight problems” with Twitter’s API. Here’s the core part of the developer’s statement:

I love Twitter and use it a lot, but I’m tired of developing for the API. It’s not that I don’t think the API team over there do a fantastic job, or that I think the API is bad, it’s a personal thing. It no longer excites me the way it once did, and this is part of the reason it’s taken a long time for me to get v2 finished, and it’s still not ready.

So I’ve decided to shut it down rather than continuing to fire-fight problems and pick away at the new version. I’d rather tell the several thousand users of the service have to find alternatives where the developers are more committed to it.

I’m sure I’ll continue to tinker with the Twitter API – I do find it fascinating, but that’s not the same as maintaining a quality product with users to answer to.

The good news is that the code behind TwitApps will live on as an open-source project. This means that anyone else will be free to build and maintain a new TwitApps themselves. The plan is to publish the code to a GitHub account after the site shuts down, tomorrow, September 18 (the emails will continue to run through the 25th).

The service had some 4,000+ users, who apparently have reached out to the developer en masse to try and get him to change his mind, but he says he won’t. So after tomorrow, no more TwitApps. Hopefully someone will use the code to build something similar.

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We’ve heard from a couple of sources that Socializr has laid off most or all of the staff and that the site is running on autopilot. The company confirms cost reductions but won’t go into more detail on the scope of the layoffs. From founder Jonathan Abrams:

We are definitely not shutting down our site, or our operations, or the company, but Socializr has taken cost reduction steps to adjust both to the economic conditions and the time required to grow an event invitation service, and we expect these moves to help us get close to cash-flow positive, albeit on a very lean burn-rate, and last a couple of years without needing further capital. Additional details are company confidential, hope you understand.

Abrams is best known for founding Friendster in 2002, one of the first popular social networks. Friendster ultimately lost its pole position in social networking to MySpace, which in turn lost to Facebook. But Friendster created a template for a user profile and friending that is still used by competitors.

Socializr was dubbed “evite 2.0″ when it first launched by various press, but it turns out that it’s probably competitive pressure from Facebook and others that have doomed the service. Evite hasn’t evolved much, but more social invitation products, such as those offered by Facebook, have stolen a lot of new user growth. Socailizr, which never had a huge user base, can’t compete with what is essentially a side feature at the mammoth Facebook.

Compete shows Socializr peaking at 90,000 or so monthly U.S. visitors earlier this summer, which is certainly not enough to sustain a venture backed business. The company raised a total of $2.25 million over two rounds, the latest in 2007.

It doesn’t look like Socializr is shutting down any time soon, but it’s definitely on DeadPool watch. Let’s hope it can find a way to pull out a win, even a small one.

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Lookery, a startup that focuses on collecting demographic data about users and sites around the web and then selling this information to ad networks to target users, is heading to the deadpool. In a blog post, Lookery’s CEO Scott Rafer confirmed that the startup will be shutting its doors after launching in 2007.

Lookery initially started as an ad network for social applications on Facebook, and quickly encountered the troubles of making money off ads on social networks. Lookery ran a promotion for advertisers, offering a guarantee of 12.5 cents per thousand ad impressions (CPMs) in January of 2008. Lookery also made a bold play for ads on traffic from European markets, guaranteeing 25 cents per thousand impressions per advert from European traffic. But things clearly weren’t working out — by July, Lookery was downgrading its guarantee offering 7.5 cents per ad impression, cutting its rates nearly in half.

Although the network served around three billion ad impressions per month, Lookery sold its ad serving business to online advertising network Adknowledge in November of 2008. By that time, Lookery had already branched out into collecting anonymous demographic data from websites and providing this info to advertisers, social networks, dating sites, ISPs, and e-commerce sites.

Lookery raised $3.15 million in angel funding over the past two years, from notable investors and VCs including Charles River Ventures and former FCC Chairman Reed Hundt. And the startup managed to raise a round of funding last September, during tough economic conditions. But in his blog post, Rafer wrote that one of the startup’s downfalls was its original dependence on the Facebook platform. Rafer also mentioned that Facebook’s Summer 2008 redesign had a negative effect on the ad network going on to say that in retrospect, he should have sold the ad network much earlier than November.

Lookery has been added to the deadpool.

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Tipjoy tried to make web tips feasible by lowering the barrier readers would have to clear as much as possible — to leave a tip, users only had to enter their Email address, with no credit card needed. The amount of money left to a site was effectively a pledge to pay up at some point down the line (Tipjoy tallied up your tips so you could pay them all at once). Unfortunately, users often didn’t take the time to tip at all, and those that did usually didn’t actually pay up.

The company launched last year as part of the Y Combinator class of Spring 2008 and while it saw steady improvements, like a new API in May 2008, it was seeing slow uptake. Later developments included an API that allowed users to send payments over Twitter, and a useful premium Twitter app called Tata-tweet. It also attempted to expand beyond tips to become a more generalized payment service. But despite a solid run, Tipjoy was unable to gain significant traction.

From the site’s blog (be sure to read their post if you have an outstanding balance):

We have decided against continuing to pursue additional funding. After a long and hard look at the market and the situation, we didn’t feel it made sense.

When we evaluate why there’s been so much hype about payments on Twitter, and yet so little traction for us (and even far less for our competitors) it is clear to us that the reason is that a 3rd party payment service doesn’t add enough value. We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party. “Simple, social payments” is *the* philosophy needed to do digital payments right, but once a service groks that, they need only to implement it on their own. We’ve been the thought leaders in this space, we see the hype and excitement, and yet we know very intimately the difficulties in gaining actual traction. The only way to get around this is for the platforms themselves to control payments – then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.

Thank you to everyone who has supported and helped us along the way.

If you have any questions, get in touch: help@tipjoy.com

Thanks,
Ivan & Abby – Team Tipjoy

Tipjoy has been added to the Deadpool.

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This was one of the original services that defined the early Web 2.0 movement. We first covered it, then known as Ojos, four years ago. The service changed its name to Riya before launching at a party, yes, in my back yard. Here’s our fist full overview of the Riya product, which helped users by auto-recognizing friends in photos and tagging them.

The company came close to selling to Google, but the deal never closed. And eventually the company refocused its efforts on visual search ecommerce (and is still going strong at like.com).

The email is below. Thanks for the tip, Orli.

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Canadian photo sharing startup BubbleShare will be shuttered on November 15, 2009. Users were notified via email and a notice on the site’s home page.

The site, founded by Albert Lai, first launched in late 2005 and we immediately liked it: “Toronto-based online photo sharing BubbleShare is just wonderful, and ridiculously easy to use. Their interface team deserves a gold star or something…” Adding interface features like zoom just made it even more fun to use.

In early 2007 the company was sold to Kaboose Inc. (TSX: KAB), a small public “family focused online media company” in Canada, for US$2.25 million plus up to another US$750,000 based on an earn-out provision.

Some Kaboose assets, in turn, were acquired by Disney in April 2009 for $18.4 million.

No word on why they’re shutting down, but this may have something to do with it. We’ll always have fond memories of BubbleShare, but it’s now in the TechCrunch DeadPool.

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But a funny thing happened as we launched our effort to sell Desktop Factory. We found interested parties who do understand the exciting potential for this breakthrough technology. We found companies that value the industry and can visualize the myriad applications for this affordable printer. Most important, we have found organizations that engage with customers and truly want to be a part of this next major wave in additive fabrication.

Nambu Networks will now focus its attention on Nambu for Mac OS and iPhone.

tr.im did well for what it was, but, alas, it was not enough. We simply cannot find a way to justify continuing to work on it, or pay its network costs, which are not inconsequential. tr.im pushes (as I write this) a lot of redirects and URL creations per day, and this required significant development investment and server expansion to accommodate.

Nambu Network’s doesn’t specifically say how many URL’s have been shortened, but looking at Twitter, tr.im was quite popular. The URL’s already shortened with tr.im will not be affected, but all tr.im links will continue to redirect, and will do so until at least December 31, 2009.

tr.im has been added to the Deadpool.

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Last year, the site seemed like it was starting to pick up steam: by summer 2008, it had forged partnerships with The Washington Post, The New York Times, and the San Francisco Chronicle, and it subsequently got CBS News as well. News sites liked Predictify because it could potentially increase reader engagement. Along with its media partnerships, Predictify also offered “Premium Questions”, which allowed businesses and market researchers to pose questions to the Predictify user base for a fee. The most accurate users would receive a portion of the money generated by the Premium Questions, and marketers were entitled to all of the resulting data (including demographics).

The site has posted the following:

Due to the tough economic climate, we are planning to cease operations and shut down the company in the near future. As such, we are no longer approving or scoring questions and apologize for any inconvenience this may cause. If you have an account balance of $20 or more, please visit your account page and enter your withdrawal information by 11:59pm on August 31, 2009 to receive payment.

We sincerely enjoyed building and operating Predictify, and we’re glad that you could be a part of it.

The Predictify Team

Predictify has been added to the Deadpool.

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At some point Yahoo shut down Bix, a karaoke and contest website that they acquired in late 2006. Yes, at some point in 2006 someone at Yahoo said “Karaoke? Contests? We gotta own that!”

Six days ago at least it was still up and running at bix.yahoo.com. Now that just redirects to m.www.yahoo.com.

We first wrote about Bix in July 2006 and then again in August 2006. The company had raised $6.77 million from Sutter Hill Ventures, Trinity, and others prior to the acquisition.

If anyone knows when exactly this shut down, we want to know. It at least needs a proper burial before dropping into the deadpool. We’ve also got an email in to Yahoo PR.

Thanks for noticing, @charliebravo.

Update: From Yahoo:

After careful consideration, we officially closed the Bix site on June 30, 2009. We initially notified our users that this was happening on
June 1st, and provided them with instructions on how to download their video content.

This is part of the ongoing prioritization efforts at Yahoo!, where we are increasing investment in some areas while scaling back in others.

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In an e-mail to its user base and with a short notice on its main website, FreeYourID has announced that it will be shutting down its service after nearly two years and a half in business. After August 15, the web service will be discontinued without a hint of explanation about the reason for the folding, although we suspect it may have something to do with VeriSign taking over the service’s main backer late last year.

When FreeYourID launched in February 2007, we dubbed it a personalized OpenID, because it allowed users to register a unique .name domain name (e.g. first.last.name) which in turn could be used as a custom, personal OpenID identifier, website URL and e-mail host. The service was the result of a partnership between OpenID company JanRain and Global Name Registry, the domain name registry for the .name extension. Alas for them, it never got any significant traction.

Until August 15, 2009, users will be able to access and use their FreeYourID accounts to make changes to their .name domain names, extend the registration period with a payment or retrieve the authorization code needed to be able to transfer the domain name to another provider. If the domain name isn’t transferred to another party, dotname will transfer all remaining .name domain names to Key-Systems automatically.

The latter will let users who are still interested in the service change the e-mail and URL forwarding settings for their domain names and continue using OpenID.

FreeYourID, however, hits the deadpool.

E-mail in full (hat tip to @pascalvanhecke):

Dear Freeyourid.com user,

We will be discontinuing the Freeyourid.com service, which may affect the way you manage and pay for your .name domain name going forward, on August 15, 2009. Please note that until August 15, 2009, you will continue to be able to access and use your account on Freeyourid.com to make changes to your .name domain name, extend its registration period with a payment, or retrieve your “Transfer Auth Code” so that you can transfer your .name domain name to another provider. The extended registration period will be fully honored by the new provider.

Your .name domain name registration term will continue until its expiry; however, we will transfer your .name to Key-Systems GmbH, an ICANN-accredited registrar who we have selected as the new provider of the .name services (”Key-Systems”). Upon completion of the transfer to Key-Systems, you will receive an email with details on how to activate your new account. With Key-Systems, you will be able to continue to enjoy your .name address, change your email forwarding and web forwarding, use Open ID, and extend the registration of your .name address and email.

Please also note the following:

1. If you do nothing, we will transfer your .name domain to Key-Systems on August 15, 2009. Your username and password will not be transferred. As mentioned above, you will receive an email with a link to activate your new direct account with Key-Systems and to check your preset data. After activation, you will receive a new username and password.

2. If you do not wish for us to transfer your .name domain name to Key-Systems, please click here to log in to your account and let us know. Your .name domain name will then be deleted on the transfer date, allowing you to re-register it with another provider of your choice; however, any remaining time in your registration term will be forfeited and there will be no refunds for time not used. If you select this option, please be aware that someone else could register your .name domain name after it is deleted from our system before you register it directly again with a new .name domain name registrar of your choice. If you intend to keep your .name address, we strongly recommend allow us to transfer it to Key-Systems.

We have genuinely appreciated your use of the FreeYourID service and your .name domain name. We believe Key-Systems will continue to provide you with a positive experience so that you can enjoy of your .name address – your personal, memorable and lifelong address.

As always, thank you for using your .name domain name, we greatly appreciate it.

If you have any questions or concerns please contact VeriSign Customer Support at 703-925-6999 or email us at info@verisign-grs.com.

Sincerely,

PJ Bolanos
Vice President, Global Customer Support

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You are correct, we haven’t closed the financing. We knew when we started the company that to compete with the likes of Microsoft, Google and Yahoo,it was going to take at least $100 million, half to build the back end across thousands of servers and half to get distribution (maybe more with Microsoft spending $100 million on Bing advertising alone). What we didn’t plan on was the terrible downturn in the economy which made it impossible to raise another $50 million to get distribution (mainly through toolbar deals). In this economy nobody wants to invest that kind of money in a company that is pre-revenue, even if the net result is potentially a multi-billion dollar company.

There are some positive things though. In the process of trying to engage strategic investors we discovered that our tech really resonates with the people in the emerging broadband TV market where you will soon be able to easily access all the internet’s video on your TV. Directories don’t scale well so you’ll absolutely need search to find things to watch and visual search for multi-media content works much better than a list of links on your TV which you can’t read from 10 feet away. We are putting together some deals with chip vendors and set top box manufacturers to port the software over to their platforms and we are going to concentrate on that market going forward.

So the plan now (unless a buyer or white knight jumps in at the last moment) is to significantly downsize, take the site down for a while (probably tomorrow) and refocus the tech in a space where we don’t have to have 3,000 servers costing a million a month to run on the back end. We are going to have to do some serious restructuring to deal with our debt and recapitalize with a different capital structure but at the end of the day we should be able to create a healthier company with a MUCH lower burn rate, with the IP intact and a significant distribution channel. Headcount will go from 45 in the current company to probably about 10 in the new one which is very difficult for everyone but unfortunately necessary. We’ve brought back our former recruiter, Deva Santiago, to handle placement for those affected employees and we have some great talent so I’m sure they will get snapped up pretty quickly.

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But there was still a central question: Would a social network aimed at baby boomers appeal to the demographic? As it turned out, no. The site is shutting down. Below is the letter to users from Wolaner.

A Message I Didn’t Want to Send

June 30, 2009

I regret to have to inform you that TeeBeeDee will be shutting down by July 13, 2009. We thought we had raised sufficient money to get us to a sustainable business, but many factors changed in the 2 years since our launch. As you have no doubt noticed in the past few months, we lacked the resources to continue developing the product to meet the needs of our community.

We will have much to say to you, and to each other, in these next two weeks. Just as we’ve shared the experiences of our lifetimes here at TeeBeeDee, we will be sharing this goodbye. For me, I can say that the people I have met at this site, and those with whom I’ve worked these past years, have been a revelation. I have learned so much from so many of you. We have thrilled to marriages, and romances, and lifelong friendships, and support to those in need. Anyone who says “virtual” friendships are less than real ones, didn’t spend time in this community.

Kat has posted tips about how to save what matters to you at TBD. And 500 TBDers have already joined a network at Ning: http://www.teebeedee.ning.com to stay connected.

As the founder, I’d like to close by saying that while our business opportunity proved disappointing, the contributions from our members rarely disappointed. I am proud to call so many of you my friends, and thank you for caring about TeeBeeDee.

Robin

Founder/CEO

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Now we’ve learned Yahoo is going to kill Maven Networks instead, the most recent in a long series of deadpooling of products and services by the Sunnyvale Internet behemoth. A tipster, who works for a large media company, tells us that he has been a Maven customer for years and was informed last week that Yahoo will cease all development on the platform and will no longer be supporting it in 2010.

We’ve confirmed with another source that Yahoo has effectively decided to shelve Maven, firing most of its employees in a move packaged as a restructuring and has already notified customers that the product will no longer be supported as of next year. Furthermore, the source tells us that the Maven technology has never even been used for Yahoo’s own video properties, underscoring why the quote I lifted from the press release in the first paragraph of this post sounds so void today.

Update: we received a statement from Yahoo about this:

“Since acquiring Maven Networks in 2008, Maven has played an important role in our video strategy, providing essential talent and core technology that has helped Yahoo! to enhance its consumer and advertising offerings. Maven technology is used in the Yahoo video player, as well as in the Yahoo Video Advertising Platform that is being used to serve both on- and off- network advertising for Yahoo! partners.

While video initiatives remain a priority for Yahoo!, both for its consumer and advertising experiences, we are increasing investment in some areas while scaling back in others. After careful consideration, Yahoo! is planning to wind down its Maven Networks customer base. This decision will allow us to focus our resources on the continued improvement of our core video offerings, such as enhancing the consumer video experience on Yahoo!. Since Q4 2008, we have closed or announced our intention to close, nearly twenty Yahoo! services– such as Yahoo! 360, GeoCities, My Web and Yahoo! Briefcase. We continue to evaluate our portfolio of products and services on a regular basis, and plan to share details of further changes with people who use our products in the months ahead.”

Yahoo also said that the rumor about the Maven team being mostly laid off is inaccurate.

There’s always the possibility that the platform will eventually live on under different ownership of course, but rest assured that competitors like Brightcove, Ooyala and KIT Digital are currently celebrating over the news.

This is the third video property Yahoo has killed off in less than 8 months, after shutting both Y!Live, a live video streaming service, and Jumpcut, an online video editing tool. Remarkably, Yahoo CEO Carol Bartz recently declared on stage at a conference that the company is actually still interested in acquiring startups in the business of digital video technology.

One month and the shuttering of a $160 million video technology acquisition later, it’s close to comical reading those words again. Then again, Yahoo’s prospects and financials at the time the acquisition was made sure looked a whole lot better than they do today, so maybe it’s just too easy to judge the move in hindsight.

Either way, Maven Networks is now a member of the deadpool club, although there’s always the possibility of Yahoo selling off Maven to someone who wants to revive it.

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So much for zipping through airport security for people willing to pay $199 per year and have their fingerprints and iris images scanned to be pre-approved.

Clear, the largest company to leverage the Registered Traveler program in the U.S., has “ceased operation” as of 11 pm PST today and their parent company, Verified Identity Pass, Inc., is in the deadpool. They were “unable to negotiate an agreement with its senior creditor to continue operations.” Users were notified this evening by email.

The service was popular – it was used 250,000 times at Washington, DC airports alone. Overall, the company said, over 2.5 million people were processed using Clear. It operated security lanes at 20 U.S. airports: Albany, Atlanta, Boston’s Logan, Cincinnati, Denver, Indianapolis, Jacksonville, LaGuardia, Little Rock, New York JFK, Newark, Oakland, Orlando, Reno, Salt Lake City, San Francisco, San Jose, Washington, D.C.’s Reagan and Dulles, and Westchester.

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Yahoo Gallery was a project that never left beta testing. It was intended to showcase cool applications that were built using Yahoo’s various services and APIs. And while it was a decent idea as a way to show off cool things like Flickr apps, it never really took off. Here’s Yahoo’s explanation message about the shuttering:

Yahoo! Gallery will be shutting down on July 14, 2009.

After careful consideration, we have decided to close the Yahoo! Gallery beta service. Although the Gallery gained a core of loyal users who enjoyed the service, Yahoo! has been reprioritizing some products to help us deliver the best possible experiences to consumers and developers. The decision to close the gallery is part of this larger strategy and will allow us to focus on helping our customers develop engaging applications using Yahoo! technologies.

If you have submitted any applications, you can go to the My Applications page, then download any images or text descriptions you wish to save.

The sentence, “The decision to close the gallery is part of this larger strategy and will allow us to focus on helping our customers develop engaging applications using Yahoo! technologies” doesn’t seem to make much sense. Isn’t that exactly what Gallery was supposed to highlight? But whatever — Deadpool, it is.

Gallery’s closing follows the much bigger decision to shutter Geocities earlier this year. And Yahoo officially shuttered Yahoo 360 last month, and Jumpcut shut down two days ago.

[photo: flickr/marshall astor]

[thanks Akash]

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The service let users create screencasts with live websites, and the early beta users really liked it:

What you see above is not a video or a slide show, it is a Flowgram. If you click on it, you will be taken to a full-screen player with what appears to be a screencast with a voiceover. Except that you can control the pages by scrolling up and down, watching any videos that might be on the page, or clicking on the live links (which takes you out of the Flowgram to that Website, but if you hit the back button it picks up where it left off). You can also add comments and share the Flowgram via a widget like the one above, which is muted and requires you to click through for the full experience.

But this evening founder Abhay Parekh sent an email out to users letting them know that the service would be closed by the end of June (in fact it’s dead now):

Dear Flowgram user:

Today is a sad day for us. We have decided to terminate the Flowgram service as of the end of the month (June 30th, 2009). The service received excellent reviews and had an enthusiastic core user base. However, we were not able to demonstrate (especially in these economic times) that Flowgrams would ever be prevalent enough for us to adequately monetize the business, either though ads or subscriptions. This is obviously very disappointing, but building the Flowgram platform was a lot of fun, and it was wonderful to see how many of you used our tool to express yourselves in a deep and meaningful way.

Although you won’t be able to play your Flowgrams after the end of the month, you can export them to video by clicking “share” from the website or “more sharing options” from the Flowgram player and scrolling down to the export to video section. It is very important, if you wish to keep your content, that you export to video and download the video by the end of the month. Please let us know at support@flowgram.com if you have any difficulties doing this.

Again, I would like to thank you for your support, for your Flowgrams and for your good wishes.

Best Regards
Abhay Parekh (Founder) and the rest of the Flowgram Team

Flowgram enters the DeadPool after raising $1.3 million from prominent angel investors Reid Hoffman, Josh Kopelman, Caterina Fake, Stewart Butterfield, Bud Colligan, Kevin Lynch, Joi Ito and Rajeev Motwani. Just goes to show that even the smartest and richest people in Silicon Valley can still make a whopper of a bad investment decision.

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Unfortunately, while the initiative clearly struck a chord with thousands of parents and their kids, one-man company / Totlol developer Ron Ilan sees no future for the website:

“My focus over the past year has been on making Totlol the best video web site for kids and parents out there. I think I succeeded. It got great reviews. It has been copied and borrowed from. It is packed with features. It has an iPhone web app. It has an active user community. It is growing. Last month Totlol was visited 150,000 times.

While building Totlol I was constantly looking for ways to make it sustainable. I failed. A “normal” website would just “fill up” with ads, but Totlol is not a “normal” site. There are two things that set harsh limits on what can be done – the target audience and the usage of the YouTube platform. With Totlol you just can’t do what other websites do.

It is now June 2009, more than a year has gone by, and I find myself running a website that is loved and growing but has no future. It needs a long term sponsor and I can’t find one. I just can’t support and develop it all by myself anymore.

So, it is now time to say goodbye.”

Vancouver-based Ilan is shutting the site down for good on Canada Day, July 1st.

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The allure of building a business around user-generated content is fading fast. SplashCast, a company which launched two years ago around the notion of helping consumers put together videos, text, graphics, and music in embeddable broadcast “channels,” is discontinuing its original product. “Most of us would rather consume than create. This is one of the big ticket findings of the Web 2.0 technology wave,” concludes CEO Michael Berkley.

And after failing to raise a B round of funding, he is now trying to sell the company. Instead of trying to make money off of user-generated broadcast channels, he is focusing on his newer Social TV product, which adds social features such as chat, commenting, and polling to professionally-produced videos.

The SplashCast product being discontinued was simply too complicated for most consumers. It was a full content-management system which allowed consumers to bring together videos with images, text, and sound. In a candid assessment of why it fell flat, Berkley says: “We were hoping to launch a publishing revolution. What we found, however, is that very few users are willing and able to make an ongoing commitment to publishing and distributing content. Lots of users test; few stick with it.”

While more than 100,000 SplashCast accounts have been created, “only a few thousand” use the product regularly, he tells me. Partly, this is the curse of building a business which relies on the creativity of users. “Like so many other Web 2.0 companies,” admits Berkley, “we simply haven’t found a way to meaningfully monetize user generated content. Users are loathe to pay meaningful subscription fees. Furthermore, advertising on user-generated video content hasn’t played out—just ask YouTube.” If only a tiny fraction of users create anything worthwhile, you either need a whole lot of users to make that work or you need to be able to attract the most creative people to your product.

But partly, SplashCast also suffered from the curse of not keeping things simple. Berkley is taking that to heart by shifting the company’s remaining resources to making Hulu-quality videos more social on Facebook and MySpace. Berkley says SplashCast videos reach 5.8 million unique viewers per month and it streams 7.2 million videos. A full 90 percent of those streams come from only 25 SplashCast channels, mostly centered around network TV shows like 24 and the Simpsons or major label music artists.

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CEO Scott Cahill confirmed the shutdown yesterday in an email to investors, saying that Hercules had “foreclosed on its collateral and has sold the company’s intellectual property to a third party”:

From: “Cahill, Scott”
Date: Wed, 3 Jun 2009 16:42:29 -0400
To:
Subject: Final Kadoink Update
Dear Angel Investor:

This is the final update on Kadoink. On Friday, May 30th, Kadoink completed the sale of its assets. As the attached letter indicates, the company contacted over 600 parties to determine interest in an acquisition of the company’s assets. Of those, 22 expressed interest. Following a due diligence period, the Company received 6 bids for the acquisition of the Company’s intellectual property. Unfortunately, the highest offer was insufficient to pay the company’s secured lender in full. The company’s secured lender, Hercules Technology II, L.P. and Hercules Technology Growth Capital, Inc. has foreclosed on its collateral and has sold the company’s intellectual property to a third party. While the details of the transaction between Hercules and the buyer are subject to a confidentiality provision, the company can assure investors that the purchaser is not an insider and the transaction was arms-length.

The Company’s inability to pay its secured creditor in full means that that the Company, with certainty, is unable to make any payments on the general unsecured claims against it. Additionally, investors will receive no return on their investment. The company will be dissolved under state law. Please consult with your tax advisor regarding how you, or your organization, should handle losses arising from the closure of the company.

On a final note, I regret that we were unable to return at least some portion of your investment to you. While we were optimistic at the start of the process that this might be achievable and we were ultimately satisfied with the size of the top bidders given what we learned over time regarding sales such as ours, it is disappointing nonetheless.

I wish you all the best in your future endeavors and investments.

Best Regards,

Scott

Venture debt looks extremely attractive when things are going well for a startup. The dilution to shareholders is minimal, usually just some warrants attached to the debt. It can make a lot of sense to raise debt when building out infrastructure, particularly since the debt can be secured against hardware being purchased.

But the terms of the debt are key, particularly under what circumstances the creditor can come in and shut down the company. Many creditors look for triggers in the financial statements that give them the right to seize assets. That’s likely what happened with Kadoink, and it’s a sad way to end a company that may still have a shot at doing something interesting. Smart entrepreneurs only accept debt agreements that require nothing but payments to be made on time. As long as those payments come in, the creditor has to stay away. Terms are usually less attractive, but in the end it may save you from the deadpool.

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From CEO Joel Norvell to Vidoop insiders, where he says that the company has no funds to pay wages or other liabilities, and that employees are being offered computers in lieu of wages:

Vidoopsters:

I am currently working with our counsel on next steps, but here is
what I know:

Vidoop LLC is officially out of business. Unfortunately, there are no
funds to pay the unpaid wages or other liabilities. I don’t yet know
if this means there will be a bankruptcy filing. However, we are in
the process of winding down and vacating the office.

Tomorrow and Friday we will be offering certain equipment such as
laptops and desktop computers to employees in lieu of a certain amount
of wages owed. As an example, a laptop might be worth $1000 in back
wages. You would only need to pay taxes on the actual book value of
the asset, which might be $250. So you would write a check for $0.153
on $250, or $38.25. The company’s liability to you would be reduced by
$1000, and you would have a laptop for $38.25.

The investors who walked out of the May 5 deal created a situation
that made an orderly shutdown impossible. However, several of us have
worked nonstop to preserve everyone’s stake in Vidoop, and efforts are
ongoing. We hope to provide details soon.

Thanks to everyone who is volunteering their time to help shut down
the office. There is simply no roadmap for a situation like this, and
I know it is frustrating. Your support during this difficult period
is very much appreciated.

Joel

It’s not clear how long the Vidoop service will remain active. The company promised “plenty of warning” of a shutdown of MyVidoop on May 14, but since then have been silent. There’s a ton of speculation in the email string (we aren’t posting most of it), but we’ll wait for an official company announcement. There’s also likely an interesting backstory around that “investors who walked out of the May 5 deal” statement.

We’ve put Vidoop in the deadpool.

UPDATE: Here’s a comprehensive story of Vidoop’s fall from former employee Chris Messina.

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Yahoo 360, which was supposed to close early last year, is finally officially shutting its doors on July 13, according to a blog post written on the site today. The social network/blogging service that nobody really used (except in Vietnam) steadily lost its steam, especially in the U.S. According to ComScore, Yahoo 360 had 13.9 million worldwide unique visitors in April. But only 982,000 of those unique visitors were from the U.S. This is down from 1.8 million unique U.S. visitors a year ago (see chart below).

Yahoo 360 was built to create a social network around a blogging platform, and simply couldn’t compete with other social networks like Facebook and MySpace, and other more popular blogging platforms like Wordpress and Movable Type. Similar to the company’s original announcement in 2007, Yahoo is promising to help move blog posts and friends lists over to a more general Yahoo profile. What took it so long to pull the plug? Yahoo says it took almost two years to shut down the service because the company was trying to find “a sustainable and adequate solution” for retaining user’s personal data from the site. The blog post also mentions that they have a solution for users but neglects to mention what exactly that is.

Yahoo also shut down its other venture into social networking, Mash, last summer. Perhaps Yahoo is going to focus its efforts on its Twitter-clone microblogging platform Yahoo Meme, which has been rolling out invites recently but isn’t getting resoundingly positive reviews. Maybe Yahoo should just give up on creating a social network and buy one instead (Twitter!). Or maybe it should just make a deal with Microsoft for boatloads of money.

UPDATE: Yahoo responded to us via Twitter (!) with this: “the solution we have for users is a new blogging tool, found in user’s profiles.”

(Photo credit: Flickr/Mark Lobo).

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Trusera, a health 2.0 community where users can share their stories about how they’ve dealt with health conditions, is officially closing its doors on May 27, according to a blog post on the site. We originally reported on Trusera’s possible shutdown in March, when the startup was nearly out of money.

Founded by former Amazon exec Keith Schorsch, Trusera launched almost a year ago. Trusera sought to bring users together who were suffering from similar health conditions. The site also took other personal information into account when connecting people, including a user’s hobbies, location, and age. Trusera would then match people up according to all of these factors and allowed users to receive email updates whenever a new match submitted a story or tip, which meant that users didn’t have to worry about constantly searching the site for new information.

In the blog post, Trusera’s site manager wrote that the startup had run out of funds and could not sustain operations. Although the site was innovative and had steadily attracted a growing and dedicated set of users over the past year, it was still a small community. The health 2.0 space is a competitive landscape to survive in—there are a number of websites, including Medpedia and PatientsLikeMe, devoted to online forums for people to share their health-related stories.

After the close, Trusera will keep a landing page with information about the site and its mission but will disable all other functionality. Trusera says that the content of site will be secured so that it can be preserved in the event that the startup is able to raise additional funds in the future.

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