RealTime IT News

Beggars Can't Be Choosy

Despite a crackerjack job at covering the crime beat, APBNews.com looked headed for the dot-com boneyard when it axed 140 employees and filed for Chapter 11. The company's story isn't any different from the growing list of start-ups that have run out of gas by the side of the road. But, every now and again, a deep-pocketed sugar daddy pulls up alongside during bankruptcy proceedings, and as they say - one man's trash is another man's treasure.

Digging through APBNews.com's scant assets, it's difficult to know what SafetyTips.com, backed by e-consultant-turned-venture-capitalist Rare Medium , sees in the ailing content site. On the surface, there's almost no synergies; but the white knight did appear from nowhere to offer $1 million and interim financing for APBNews, apparently in hopes of boosting traffic to its SafetyTips.com Web site. Truth be told, that's a pretty penny if you consider the ragged state of affairs APBNews is in right now. But creditors rejected the deal out of hand because of a handful of key details related to the tentative bid.

APBNews.com's assets are scheduled to go up on the auction block in September, but the committee representing the failed company's creditors held its nose over a clause that stipulates that any competing bidder must top SafetyTips.com's original offer by 10%. In addition, the committee is soliciting a second opinion regarding APBNews' valuation.

Here's a newsflash - after spending nearly $35 million of other people's money, with over $8 million in debt, APBNews is hardly worth the $70 registrar fee. Apparently, the phrase beggars can't be choosers, is painfully absent from APBNews' creditors' vocabulary.

Looking at the list of stiffed benefactors, it looks like a crummy branding rerun. Leading the pack is 24/7 Media who got stuck with a million dollar check that bounced like a rubber ball. Advertising.com is a close second with a three quarters of a million dollar write-off, while AdSmart is left with a $700,000 nothing-burger.

But, none of the aforementioned companies likely realize that they share the blame for using risky Internet tulips to fuel their bottom line hyper-growth. If it weren't for a bevy of naive Web start-ups with daddy's charge card, far fewer companies would be willing to pony up the industry standard collection of highway robbery service fees associated with online ad spending and Web hosting.

The bottom line here is that SafetyTips.com has offered a pretty fair price for a pseudo-branded, money-losing, out-of-favor content Web site. Without an army of talented and dedicated editorial grunts greasing the wheels, APBNews.com holds little stand-alone value. And since the committee has gambled to file objections to the terms, SafetyTips has recently taken its bid off the table. That means APBNews will go to auction where it's unlikely to find a bidder who's willing to pay something for nothing. Maybe the creditors should add another phrase to their vocabulary. A bird in the hand

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.

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