The early indications - besides the Wall Street seesaw, the housing meltdown, weak "Black Friday" and the credit crunch - are starting to make themselves known. In the tech world - when social networking sites start closing (and/or get acquired) it's sort of the canary in the coal mine biting the dust.
This week a couple of sites announced that they were going into the deadpool - Pownce (co-founded by Digg’s Kevin Rose) and Twing announced they were shutting down. This comes on heels of the death of other sites over the past 4 months - sites that were fairly well funded and had some "good press." Some of them were even founded by very successful entrepreneurs. Here's a small sampling:
- Eyespot ($3.7 million in Oct 06)
- Uber ($7.6 million in funding - May 2008 - cofounded by former Friendster CEO and NBC West Coast president Scott Sassa)
- Wallop (from Microsoft's Research Team)
- Fleck (€225k - based in Netherlands)
- Social.FM ($5 million in funding)
- TripHub ($15 million, founded by Josh Herst, an early member of the Microsoft Expedia team)
- MatchMine ($10.5 million, founded by Mike Troiano, CEO of Ogilvy & Mather Interactive and Brandscape)
- Akimbo ($56 million, investors including AT&T and Cisco)
- Capazoo ($12 million)
- etc, etc, etc.
TIP #1: Eyeballs do not necessarily equal money.
TIP #2: You need money to stay in business.
TIP #3: Just by having a screwed up name that no one can pronounce doesn't mean you'll get money.
TIP #4: See tip #2
Speaking of folks that may have had too much Turkey - the good folks over at Twitter have turned down a $500 million (mostly stock) offer from Facebook.
Um.... yeah. Half a billion dollars for a site with zero business model - and a huge cost structure. Good plan! I know, I know you're "...working on a monetization plan for the middle of 2009...". Good luck with that.
Again, see tip #2...
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