Hasta La Vista Quepasa

Summer’s in the air, the BBQ grills are smoking, and sun-worshipping bodies
line the beaches nationwide. Now a third of quepasa.com’s worker bees should have plenty of time to catch some rays
since the Spanish portal passed out a round of pink slips earlier this month.

Proving that many dot-coms need to find a way to actually monetize those
eyeballs, the start-up is on the bubble. In the current market ebb and
flow, profitability keeps the ship afloat; and losing a portly $0.68 per
share in its latest quarter, quepasa.com looks like it may be going
down for the last time.

Despite posting first quarter numbers that exceeded estimates, quepasa
couldn’t pull the wool over investors’ eyes. Though revenues surged 104%
through the fourth quarter, the numbers were hardly impressive, at an
anemic $850,000, on losses of $10.7 million. Although hardly profitable,
rival Starmedia Network at least collected a
respectable $10 million in revenues for the same quarter.

With a third of its workforce standing in the bread line and a cash burn
rate on an express train to broke, the Hispanic heavyweight is scrambling
to plug the leaks. But it’s coming up a few fingers and toes shy.

Public for just under a year, quepasa is now facing the make or break
point. Hiring an investment banking firm to consider strategic
alternatives, odds are better than even that the end is near. Although an
investment is on its wish list, beggars can’t be choosers. Quepasa already
used up its last wish with a $10 million cash infusion by Gateway
just two months ago, in exchange for a 7.6% stake.
Besides, more money wouldn’t turn things around here. It would just prolong
the inevitable.

The traffic numbers aren’t all that impressive in relation to the fundage
spent. It’s a gamble whether we’ll see a merger come out of this latest
failed venture since there’s not much of value to a prospective buyer.
Quite frankly, watching a foreign language portal fall by the wayside may
actually prove beneficial to rivals. With only a handful of these sites
catering to the Spanish-speaking community, competitors won’t likely have
to work up a sweat to woo stranded Web surfers.

Reaching a modest high of $26, quepasa hugs tightly to its current 1-3/4
penny currency. But none of this should come as much of a shocker to
investors who can read a quarterly filing. When the newcomer originally hit
the public markets, it arrived like a freeloading houseguest without a
nickel to its name that didn’t come from VCs. By the looks of it, investors
feel quepasa has overstayed its welcome.

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