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


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