Lou Dobbs Navigating Stormy Skies
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Former CNN Moneyline host, Lou Dobbs, announced late last week that his SPACE.com brainchild would go where few Net start-ups have gone before - profitability. And to get there, the newcomer will apparently have to lighten its load to the tune of 22 layoffs, or about 20% of its workforce. According to official statements, the move is curiously part of the New York-based Web site's "aggressive growth strategy."
To date, the outer space-centric upstart has managed to raise an impressive $60 million from blue chip investors solely on Dobbs' crackerjack reputation. But it's likely that the company was put on notice sometime during the last month that additional funding would be a crapshoot in light of the market's ongoing meltdown. Further, it's a gamble at best that apathetic retail investors will realistically embrace an IPO from a niche content player like SPACE.com, regardless of its celebrity founder. In light of the dimming prospects, previously anxious investors can't be blamed for becoming a tad more tight-fisted with the pocketbook.
If there's any hope left of panning for Internet gold in the new issues market, a few whirlwind belt-tightening efforts were in order to achieve "an accelerated path to profitability." That target date has been pushed up to the fourth quarter of 2001, which still sounds an awful lot like the bare minimum that might have been needed to appease antsy investors. In addition to the job cuts, SPACE.com's president Sally Ride, the first American woman in space, resigned from her post after more than a year and a half at the helm.
SPACE.com has been on the acquisition trail since this last summer, first scooping up astronomy software developer Sienna Software in May. Following this was its SpaceWatch.com land-grab in July from now defunct Pseudo Programs, which shuttered its doors for good two weeks ago. Dobbs said in an interview that his company plans to make a pair of additional acquisition announcements sometime over the next few weeks.
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