I spoke to Patrick Chapman, LookSmart’s director of corporate development, briefly after the auction closed this morning. He says its too early to say what they’ll do with the assets, but they’ll likely issue a press release sometime soon. Chapman says he’ll be talking to Edgeio’s former employees and will hopefully offer some or all of them jobs with LookSmart.

LookSmart is a small public company with a market cap of around $68 million. They’ve made some recent moves to build the business back to what it was in the 90’s, including a recent share repurchase announcement.

This marks the end of this stage of Edgeio, a company I co-founded with Keith Teare in 2005 and which we put into the deadpool earlier this month. But I am happy to see the assets move to a company with the resources to move the ideas forward.

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Interested parties can register to bid at Domain-Tools here. Bidding starts at $250,000 and bidders must pre-register to bid. The auction finishes Friday 21 December with payment to be paid via Escrow no later than the end of the year.

Also on the auction block is the assets Adaptive Real Estate Services, a company purchased by Edgeio last year for $200,000. The reserve price for that sale is $150,000 and the same rules apply as for the Edgeio auction.

Also at auction this week is the independent film focused video hosting site YouAre.TV. The founders of the 2 year old site are moving on to a new startup and a keen to sell. The traffic for the site isn’t spectacular but the value would appear to be with the IP which could easily be used on similar sites. The coding utilizes Amazon EC2 so running costs are low, and the site has a number of content deals in place with corporate clients including Verizon. The eBay auction for YouAre.TV can be found here. Bidding starts at $25,000.

Update: all the relevant details on Edgeio for the sale can be found on a wiki here. As several commenter’s note, the wiki makes for interesting reading.

Update 2 (Michael Arrington): One thing I want to make clear is that all of the proceeds, if any, from the sale of edgeio will go to the creditors and preferred stock holders. Common holders, like myself, will not be getting paid and my financial conflict of interest with this company is essentially over.

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Edgieo first launched in February 2006 after a beta period. The company raised a small angel round of financing, then in October 2006 closed a $5 million Series A from Intel Capital and Transcosmos.

The company burned through that money according to plan, meaning they ran out this month. The product roadmap was fulfilled, meaning development lags didn’t hurt the company. But the revenues didn’t come in and user/partner milestones weren’t met. And that meant no one else was going to put more money into the company.

For the last few months CEO Keith Teare has been working on a number of plans to keep the company going, but none of them panned out. So tonight the board decided, appropriately, to shut the company down. This will be orderly – employees will be let go but will be fully paid. In this job climate, all of them will hopefully find work very quickly.

I’m obviously sad about this since I was one of the founders, although my involvement for the last two years has been as a board member only. But this is the way the startup world works. You win some, but you lose most. Edgeio wasn’t meant to be a success. And now Keith and the rest of the team can start the fight over again, and hopefully next time they’ll come out winners.

On a side note, our job site, which is run by Edgeio, will be transitioning over in the next day or two.

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Edgeio’s classified listing platform has been doing well. We use it for our CrunchBoard job board, and many other blogs and websites have begun to use it, too. The company recently started reaching out to bloggers to discuss business development deals. Which is fine. But what isn’t fine is random mass emails out to top bloggers (including our own Duncan Riley) to pitch the product.

I emailed Keith Teare, my co-founder and the company’s CEO, who says this was a simple mistake and was only meant to be sent to people they’ve already had direct contact with. That’s fine, but as I said I’m going to call them on this since I’m a stockholder and my name is associated with the company.

Part of my promise to readers is to call things like I see them. Conflicts of interest are disclosed on our about page. And when a company I’m involved with does something I think is particularly smart or not so smart, I will point it out here on TechCrunch. File this one under “not so smart.”

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Clavier, who has a degree in computer science, has been actively investing in startups over the last few years and has had notable successes such as Truveo (acquired by AOL for a rumored $50 million), Userplane (acquired by AOL for a rumored $35 million), MyBlogLog (acquired by Yahoo for $10 million), Kaboodle (acquired by Hearst for a rumored $30-40 million), Mayas Mom (acquired by BabyCenter for $7 million), Dogster, Kongregate, Edgeio and many others. In other words, he has an eye for winners. His investment philosophy will remain much the same, he says. He’s just now investing money from limited partners as well as his own capital.

He says he’ll invest the fund in a total of 30 to 40 seed stage startups with investments ranging from $100k – $500k. SoftTech VC will focus on consumer Internet.

Clavier has made four initial investments through the fund: Satisfaction Unlimited, Social Media Network, Grouply (which will launch at the conference today) and Active Athlete.

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Hotswap is targeting the $370 billion/year U.S. used car market with a free, video-focused classifieds site. Listings are optimized to allow users to quickly upload video of the car with a camera phone or other low end video equipment.

Both normal users and car dealers can upload listings. The company has inked a deal with Red McCombs Automotive, which will upload all of their used cars to the site. Other business development deals are being negotiated now.

The company says sellers were very happy during the beta testing period and reported very high sell-through rates.

They’ve raised around $1 million in capital from Kinsey Hills Group, the investors behine Scribd and others. Hotswap competes with Vast, eBay, Edgeio (a company that I co-founded) and many others.

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It seems a good fit for selling podcasts or research reports. Affiliates can also grab the widget code to sell your product on their own sites as well for a revenue share determined by the content owner. Michael Arrington, the editor of this blog, is a founder and investor in the company.

Digital lockers are nothing new. E-Junkie, Payloadz, Tradebit, and Bitpass (shutdown) have done it for a while. However, Edgeio has the added advantage of leveraging the paid listings through their existing listings network and providing a very straightforward product.

It’s pretty simple to get started. You sign up to create a listing like any other through the “Paid Content” link. Next, select your content type, price (currency), affiliate percentage, and coupon code. Finally, Edgeio lets you make a teaser “preview” for the content to give buyers an idea about what they’re purchasing. Once completed, you get some embed code and the listing is placed in Edgeio’s index, linked to the page where the widget is embedded.

An example of one of the widget embeds is included below. The other version of the widget initially shows visitors a teaser, until the content is purchased and unlocked. Use the coupon code “vgforfree” to unlock the content. To purchase the content, you need to sign into your Edgeio account and to pay by credit card or PayPal. The content is then unlocked for your Edgeio account.

Edgeio splits revenue from sales through the widget 80/20 in favor of the content creator. The creator can then split that 80% for sales through affiliates at any percentage they like.

Update (Arrington): This is a company that I co-founded in early 2005 with Keith Teare, months before I started TechCrunch. There is a clear conflict of interest, although I did not write, edit or give input on this post. For a balance of viewpoints, see Techmeme.

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Iqzone’s “Snap Send Sell” feature allows users to take a photo or video clip of any product or service, text a description and send as a Multimedia (MMS) message to iqzone. Iqzone then categorizes and adds the listing on iqzone.com as well as 3rd party services including Edgeio. Buyers can connect with sellers in real-time by setting mobile or RSS alerts for items they are interested in. They can also share ads with their Facebook Friends and search iqzone using their mobile phone or the web.

The company says that the product is the future of classified advertising. It’s certainly a different application and fits well into the “what will they think of next” category. Whilst the one-to-many distribution of classified listings has some appeal, I can’t help but think that it’s a solution looking for a problem. Others may think differently.

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I won’t say much more here due to the conflict of interest (I remain on the board of directors of edgeio and am a stockholder). For other coverage, see BusinessWeek, VentureBeat, and Greg Sterling. I’ll add more links here as additional coverage comes in.

Our coverage of the edgeio launch in February is here.

Additional Coverage:
Rex Dixon

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After much anticipation and a period of being available to a private audience the team at Edgeio took the covers off of their creation tonight and launched to the general public. Edgeio takes listings (classifieds) from RSS-enabled sources and organizes them in a central location for users to be able to browse and search. The Edgeio ethos is that content belongs on the edges, and that is where the name originates from (Edge input/output). Content on the edges means the content on the millions of blogs and other sites out there which Edgeio does a good job of aggregating and organizing.

From a seller’s perspective, to post an item you write about it on your blog and tag it ‘listing’ (along with any other keywords which are suitable to categorize the item for sale). Edgeio taps into the blog cloud via weblogs.com and other ping services (as well as its own ping server which is at http://www.edgeio.com/RPC2) to find new posts that have been tagged for listing. Once it finds your post, which usually happens very quickly, it will send a trackback to your post to make you aware that Edgeio has found it. Once you have posted, the first time you post an item you will need to go to Edgeio to claim your blog (a process that works similar to Technorati’s) from which point you can add additional metadata to your listing within Edgeio. The additional data you enter includes things like additional tags to categorize the item, your geographic location (which again you only enter once and is used when you search for items to buy as well) and the price of the item. It only takes moments from the time you post your listing to the time that it appears in Edgeio and is available for buyers to find.

From a buyers perspective, you can go to Edgeio and then find items that are for sale a number of ways. The first and most obvious way is to enter terms into the search box. This will display results which are item summaries sorted in chronological order. The other way to find items is by browsing through the tag clusters that are located on the front page and working your way down to items that interest you. The last way in which you can find items is interesting, as Edgeio has lists of most popular items, the latest items and the most active weblogs posting items. The popular items list and the latest items list have feeds available for users to subscribe to or use in other applications. One cool thing you notice is the geography slider widget that is persistently in the sidebar while you are looking through items. If you are looking at search results and would like to filter them down to just the state you are in, or the zip code you are in, then you just slide the slider. I have been told that this slider will be even more fine-grained in the near future by giving ’slide points’ which are certain distance radiuses around the current points (eg. Within 10 miles of your current post code). The way the slider works and refreshes the results or the page automatically has been very well implemented and makes a lot of sense. The interface has been very well done, it is clean and easy to understand (I tested this by handing over the URL to a non-tech user and they were able to find listings the may be interested in).

Throughout the search results, listings from blogs that have been claimed gain precedence over unclaimed listings. In the future sellers will have the ability to highlight their listing for a small fee. Reputation is currently handled via third party sites, the seller has an option to associate their listing with their Flickr, eBay or LinkedIn account so that their credibility can be traced back. It appears at the moment that a lot of the transactions on Edgeio will be face-to-face transactions, where verifying credibility is different as opposed to when you are sending payment to somebody you don’t know in a foreign country or another state.

The whole point of Edgeio is to connect the buyer and seller through its platform that aggregates listings, so there are no payment options at the moment nor can you see any account history from buyers or sellers on what they have purchased or sold before. It is currently being left up to the buyer and seller to close the transaction. Edgeio also offers a lot of social controls as a means to keep the listing relevant and current. Users are able to mark a listing as being ‘bad’ by telling Edgeio that the item is spam, that it is no longer current, that is hasn’t been categorized correctly or that the publishers information is not accurate. These forms of social controls and filtering work well on sites such as Craigslist and their effect on Edgeio and how well they work to prevent spam will only be known over time.

On important aspect to Edgeio is the availability of feeds for every part of the system. With standard RSS feeds (Dave Winer is an advisor to the company) developers of other applications or webmasters are able to include items for sale on Edgio into their own sites or applications, or take the listings further in some form of a mashup (I am guessing we will see the first mashups – potentially with Google Maps, shortly). I like the idea of being able to subscribe to a feed that will display new items that may not be available now but I wish to purchase – so I will see them as soon as they are posted.

I subscribe to the theory that the publishing and control of content belongs to the user and that we are heading in that direction. There are a few reasons for this, the first and most important is that the user owns his or her data, even if it is something as simple as a classified listing, so the user should be able to have effective control over the environment where this data is contained. With centralized services such as eBay and Craigslist the buyer and seller are left to the mercy of the platform provider. Blogging has enabled users to create content and publish it on the web easily, so using that platform for listings is only one of a number of potential services that can be built on top of what we have today. The short-term barriers I foresee are the size of this market today and how effective Edgeio will be in promoting itself as the standard place for listings. In terms of scalability, only a much larger inventory will be able to test the theory of having tags and tag clusters as a directory as opposed to a rigid directory structure (which is very hard to maintain and expand). Edgeio is putting categorization and the categories themselves into the hands of users with self-monitoring in place that will attempt to assure that things don’t get out of hand. While having 1,300 or so listings at the time of launch is a good start, the size of the market and the number of listings on blogs will not compare to eBay or Craigslist any time soon (though Edgeio can also use other directories as sources as well, making it a classifieds meta-site).

In the long-term there is a fantastic opportunity, especially since publishing to the web on your own terms is something that is becoming more and more available to ordinary web users (and with services such as MySpace and MSN spaces the number of users is getting really big). Edgeio is a very open platform, they want others to build applications and use the listing content in other sites and applications. I am sure that regardless of the success of Edgeio that its more traditional competition has had to think about their own policies with providing feeds and other openness measures and I hope that the launch of Edgeio may spur change with other platforms.

Edgeio was founded by Keith Teare (easyNet and Realnames) and Micheal Arrington (Techcrunch) along with the founding technical team consisting of Matt Kaufman (There and Realnames) and Vidar Hokstad (Yahoo! Europe). Edgeio have raised $1.5M in angel capital from a large list of investors with names such as Louis Monier, Frank Caufield, Auren Hoffman, the RSS Investors Fund, Jeff Clavier, Ron Conway and Michael Tanne.

Edgeio will need to overcome those barriers, as well as have more and more sellers adopt the model that they are pushing (ie. The ‘listing’ tag). They are going the right way about it, with a very nice interface and some very cool features, along with the will to make this happen and the right people to see it through. The launch is also being reported by Om Malik amonst others.

Disclaimer: Mike Arrington, a founder of Edgeio is also the Founder of this blog. All the opinions expressed in this article are those of the writer (Nik Cubrilovic)

Only a few people outside of the company have seen the product. A couple of days ago Keith gave a brief demo at a SDForum Search SIG event in Silicon Valley. Rob Hof from Business Week was in attendance and wrote his thoughts on his Business Week blog. To get a better understanding of what Edgeio will be, see his post here.

To sign up to be notified of the launch, enter your email address at edgeio.com.

It willl be launching in the near future. If you’d like to be notified of the launch, please give us your email on the temporary landing page.

Edgeio will give you the ability to do new and (we think) really exciting things with your blog. If you have a weblog and you’d like to be part of early testing, there is a field for giving us your blog address as well.

Edgeio will also have its own blog soon with more details.