APBnews.com Exhausts Funding

APBnews.com, a once-ballyhooed news
organization devoted to coverage of crime and justice, said it has fired
all of the company’s 140 staff and limited its scope of operations.


The news marked the first outright Silicon Alley failure of a Web startup
this year.


At a company-wide meeting this morning, the Web site’s chairman and chief
executive officer Marshall Davidson told employees that the company had
exhausted its funding. Although a search is on for additional investors,
and possible deals with major media companies, the company is not paying
its employees beyond today. Employees are being asked to stay on as
volunteers.


APB Online was in the midst of its third round of financing in March when
the market’s valuation of Internet companies drastically declined, Davidson
said in a prepared statement.


“Following this downturn was a difficult time to raise capital for most
Internet companies, and negotiations with strategic business partners have
taken longer than anticipated,” he said.


The site, which now joins a growing list of failed dot-com plays that are
headed for business school case studies, had received splashy coverage of a
significant funding round of $20 million only a year ago. BancBoston
Robertson Stephens arranged the first $16.5 million of that financing and a
second infusion of $3.5 million came through one month later. At the time
of the announcement, the company said it would use the proceeds to hire new
people, expand its programs and strike more distribution deals.


The company was founded in 1998 and had counted among its staff more than
55 veteran newspaper and television journalists, including two Pulitzer
Prize winners, as well as more than 130 freelancers under contract nationwide.


Since launching in November, APB Online had struck distribution deals with
America Online, Snap.com, Yahoo!, and MSNBC.com as well as television outlets.

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