MappingTheWeb //

With many web 2.0 start-ups lacking in the revenue department, declaring bankruptcy, or failing to prove out their business models , what do you do with your website and operations as many are still driving reasonable amounts of targeted traffic? Obviously, large financial firms are not going to represent a 2-man operation and scout out potential acquisitors. It’s just not worth their time. So what’s the best way to go about exiting? eBay apparently.

This first came to my attention just over a month ago when TechCrunch reported that Kiko was putting itself up on the auction block at eBay. At first this seemed ridiculous to me, but after the AJAX calendar company received $250,000, I took a second look. A couple of interesting points to note:

• The bidding climbed over $100,000 in the last two minutes
• The company was eventually acquired by Tucows - the popular shareware site
• Kiko was only one year old
• Rumour has it, there was only one full-time employee and two part-time contractors

I guess it wasn’t such a failure after all.

Quoting TechCrunch:

“New companies are easy to start, easy to fund and (now) easy to sell for a few hundred grand on eBay…this might be the way many of these small companies eventually find liquidity.”

So why am I bringing this up a month after the sale - because another company, LiveLocker, has called it quits and listed itself on eBay. The auction is currently live and bidding will end in 10 days. Currently, the minimum bid price is $5,000 but we haven’t seen a bid yet. It will be interested to watch this story unfold and see what the company sells for - if it does at all. TechCrunch has also posted a list of other companies who have listed themselves on eBay here.

In the end, all is not lost for these web 2.0 start-ups. And yet again, eBay fills an inefficiency in the market - and makes some good money doing it.