Like a ‘Dear John’ letter, only much more expensive, FIRETAP Communications
officials told investors Thursday they were closing the door on operations
by the end of June.
Homestore.com, a one-stop information and service site for the real estate
industry, was a major investor in the broadband start up, providing a
high-speed Internet access option to its customer base of realtors and
online visitors.
The fate of FIRETAP employees is unknown at this time. The company Web
site was shut down last night, before news of the closure was
announced. No announcement was made, either, regarding the company’s
customers, who will need to find new Internet and telephone service by the
end of the month.
Homestore.com and FIRETAP officials could not be reached for contact.
A joint venture with the National Association of Realtors, FIRETAP was an
experiment to bring its own branded telecommunication services to the U.S.,
with services ranging from high-speed Internet access using digital
subscriber line (DSL), cable and wireless, to local and long-distance
telephony.
With offices at its headquarters in Thousand Oaks, CA; Scottsdale, AZ;
Dallas; and Washington, D.C., the competitive local exchange carrier (CLEC)
hoped to switch real estate professionals and consumers to its
offering. The CLEC opened its doors to business in May 2000.
The company made all the right moves, bringing in a founder of DSL reseller
Rhythms NetConnections, Eric Geis, to head up operations and signing an
alliance with America Online, Inc., to provide co-branded Internet service.
Unfortunately, the service never found traction with potential customers or
its own members in the real estate business and funding by investors like
Encore Venture Partners wasn’t enough to keep the company afloat.
The company said it would take a $6-9 million loss on its investment, a
mostly non-cash one-time charge to its second quarter earnings. According
to officials, FIRETAP accounted for less than one percent of Homestore’s
first-quarter revenues.
