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Edgeio Auction
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December 11th, 2007 by 
Jay Westerdal
A few days ago Techcrunch broke the news that Edgeio was joining the dead pool. The business is being shut down and the company is closing. That leaves one thing left to do. Edgeio has listed all their assets for sale in our auction platform. We are holding a special auction for them at www.domaintools.com/edgeio-auction/. The auction starts immediately and will run for the next week and end on Friday the 21st and 11:00am PST. The auction process will stay open if any bids are received in the last five minutes of the auction. To qualify for the auction, bidders will need to contact Susan Prosser at +1.206.838.9032 before being allowed to bid. Escrow will close this calendar year and funds will be delivered to the seller before the end of 2007. The edgeio assets are starting at a reserve price of $250,000.
There is a separate auction for the Adaptive Real Estate Services assets as well. The company was purchased by Edgeio last year for $200,000 and an additional $300,000 was poured into it. The reserve price on that lot is $150,000. The ARES portion is making $12K a month right now. These two lots are set with low reserve prices and are both expected to sell.
Edgeio raised $6m in venture capital since December 2005. It’s investors included Intel Capital; Transcosmos; Solborn; RSS Investors; Ron Conway; Frank Caufield; and other well known angels. Its traffic and partnerships have grown significantly, but due to difficulties raising its next round of financing it was decided to close the company and seek a sale of its assets to a new owner. To learn more about edgeio and assets for sale, go to http://wiki.edgeio.com.
The DomainTools auction platform is more versatile than just being able sell million dollar domains, we can auction any product including corporate assets. Ebay has that instant close process and doesn’t maximize the value for the seller. Our custom auction system was built with AJAX and instant updates. Users don’t need to refresh the page to see changes in the bid history or if they are the current leader or not, everything is pushed to the users browser. What better way to auction a Web 2.0 company than a Web 2.0 Auction system.
UPDATE: Keith Teire (CEO of Edgeio) writes in on the comments of the TechCrunch’s coverage of the auction:
In answer to some of the questions:
The 60 servers
These are needed for various reasons. Only 2 are front end web servers.
-We have a large ingestion system for advertiser feeds (about 20m records from feeds, about 2m changing daily). This system also caches listings from eBay, Amazon and CafePress (about 120m listings). This is somewhat like Googlebase. A BIG system
-We have an intelligent facet extraction system that normalizes the data and provides structure for front end structured search.
- We have an in memory database that feeds the search engine.
- We have a front end query server that allows for partitioned data and front ends.
- Finally we are fully redundant. That is, the entire system is in 2 data centers that can run independently of the other.
Secondly, revenue and costs
edgeio was a pre-revenue company. That was entirely within plan. We are building an Internet scale classified ad platform for ALL publishers. That is a big effort. We had 11 full time employees, almost all engineers. No sales or biz dev staff yet. Our costs ($6m over 3 years) are well within normal limits for a venture backed company with a big idea and plan. Despite that we had begun to get revenue (I would characterize it as early stage accidental revenue).
Our plan for 2008 was $1.6m and for 2009 about $16m. Last Thursday we pushed the first part of our publisher facing revenue platform. Check out http://www.edgeio.com/cb-intro to see it. By mid January this was to include a CPC and CPA component. This platform is all but finished. A buyer would own it for a fraction of the $6m it cost to build, and without needing the 3 years it took to build it.
Interest in the auction
Our decision to auction was taken because of the overwhelming interest in the companies assets. There was no good way to determine who to sell to. An auction seemed the fairest and most transparent way to go. My personal belief is that our investors pulled the plug WAY to early and that a buyer will get a huge bargain at almost any price up to $6m. We had term sheets within the last 2 months and interest at valuations around $10m. unfortunately they could not be consummated in time.
Hope that helps
Keith Teare
ceo/edgeio
Keith answers a lot of the questions people have about the company. The interest in the assets are growing, we have had several companies apply for bidding access.
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Posted in DomainTools Auction |
22 Comments »
December 11th, 2007 at 6:03 pm
Exactly what are included in the assets? A building? Land? Computers? Servers? Domain names? Trademarks?
Just curious…
I would think a buyer would want detailed specs, financial sheets, etc.
Maybe prospective bidders will get this info from Ms. Prosser?
UPDATE BY JAY: Jennifer, just look at the wiki, it is all documented.
December 11th, 2007 at 6:23 pm
Never mind; I went to the website; that page takes you to the highlights of the assets.
Is this a parking company that goes beyond the capabilities of Sedo, etc.?
Given the events of the last week or so, it might be a bad time to unload such assets.
Someone with the right pocketbook and tech savvy may end up with a bargain.
Too bad the current owners couldn’t make a go of it.
UPDATE BY JAY: The investors want to close this company during the 2007 financial year. They simply did not raise the money to continue operations. I think it is smart to close the company this calendar year.
December 11th, 2007 at 8:22 pm
That sounded like such a great idea. Somebody will probably take pieces of that company and find a real jewel in there somewhere.
December 11th, 2007 at 9:07 pm
I had an account with Edgeio. They had a very nice brandable classified listings system where they took a percentage of sales and it was affiliate enabled as well.
I am surprised to hear they are going under.
Mark Fulton
http://DotSauce.com
December 12th, 2007 at 5:14 am
I especially like ARES, even if I didn’t read about monthly expenses. But sustained revenue, and a portfolio of clients in that market is a must.
Good luck for them and for you Jay.
Nuno Oliveira
CatalogDomains.com
December 12th, 2007 at 8:50 am
I predict that the Edgeio Auction will NOT net more than 50K.
December 12th, 2007 at 10:31 am
>> Edgeio raised $6m in venture capital since December 2005.
>> It’s investors included
>> Intel Capital; Transcosmos; Solborn; RSS
USD6million$ burnt away in less than 2 years ??!!
please tell Intel e.t.c. : :::::
next time they may b[be] better2use those million$$$$ 2[to] buy
a best domain ,
thence ,
potentially creating
that instant buzz worldswide +
that asset for ever
cheers ThANKye 2w
December 12th, 2007 at 4:58 pm
“That LEAVES one thing LEFT to do.”
Great gramma, Jay.
December 17th, 2007 at 3:29 pm
Hey Jay,
Maybe you should contact these people in Portugal ?
http://www.theregister.co.uk/2007/12/17/microsoft_name_auction/
John
December 18th, 2007 at 6:16 am
So Edgeio seems like an Adsense competitor? But instead of links to other sites – it links to classified ads? Sounds like a great idea to me. I definitely think that could fly and someone can pick up a bargain. Google should buy it for the IP.
March 17th, 2008 at 4:29 am
The internet technology combined with auction system is a great means of bringing the buyers and sellers together. This seperate auction for the Adaptive Real Estate Services would provide valuable exposure for their services..