No one blinked when CMGI paid $407 million in stock for auction technology specialist uBid
in 2000.
The deal gave the Internet investor access to a promising sector and technology with consumer and business applications. Even when the market convulsed in 2001, CMGI stubbornly clung to uBid, jettisoning several other portfolio companies first.
But the company never really caught on, and after three years, numerous tweaks of the business plan, and management changes, CMGI has sold uBid to Takumi Interactive, a unit of Petters Group, a consumer goods supplier and distributor.
Financial terms were not disclosed, but it’s a safe bet the purchase price was far lower than what CMGI paid.
“The sale announced today is consistent with CMGI’s plans to achieve its financial goals and to tighten its focus on operating its global supply chain management business,” George A. McMillan, CMGI’s president and CEO, said in a statement.
The company also recently sold its majority stake in search engine Alta Vista to Overture (the deal is pending). CMGI spokesman John Stevens said the moves will help CMGI narrow its focus and improve its bottom line.
uBid’s problem, industry observers said, was that it never decided if it was an auction site or a retail site, and neither could consumers.
It switched gears in the second half of 2002, scuttling a consumer exchange (after unsuccessfully trying to charge user fees) and preferred partner exchange in November and introducing a fixed-price ‘superstore.’ But uBid, based in Chicago, never had the name recognition or traffic of Amazon, eBay and Buy.com.
Two current uBid executives will remain with the new parent company. Robert H. Tomlinson Jr., previously uBid’s CFO, is now president of Takumi Interactive. And Timothy E. Takesue, a member of uBid’s founding management team, is now executive vice president of merchandising.
