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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: oldirtybastard who wrote (7397)	1/3/2001 11:53:46 AM
From: Sir Auric Goldfinger	Read Replies (3) \| Respond to of 19428

QUEPASA.COM THROWS IN TOWEL, WILL LIQUIDATE 1/2/1 16:1 (New York) By GLEN CRENO The Arizona Republic PHOENIX - In the end, nothing much was working for Quepasa.com. The Internet portal geared to U.S. Hispanics tried several strategies to make its finances click. There was a heavyweight board of directors, celebrity endorsements and alliances with high-profile Internet players. When the business went bad, the company slashed its staff to cut costs and offered itself for sale or merger. When there weren't any takers, Quepasa tried to hawk individual parts of the business. But nothing could overcome the red ink, the swooning market for Internet stocks and the downward momentum the young public company found itself fighting. Last week, Phoenix-based Quepasa said it would liquidate everything from its brand to its office furniture, joining the growing wreckage of Web companies gone bad. ``These kinds of companies are dying very, very quickly,'' said Glenn Powers, a senior vice president in the Seattle office of Roth Capital Partners. ``In some ways, people shouldn't be surprised. Businesses that don't make money, they die.'' Quepasa certainly fell into that category. It went public in the summer of 1999, raising $48 million, but as of Sept. 30 had racked up a deficit of $62.1 million. The company lost $26.3 million through the first three quarters of 2000 alone and had shelled out $15.7 million for advertising and marketing. Quepasa's stock plunged as losses mounted and its prospects of becoming profitable dimmed. Its shares traded near $25 after it went public, declined steadily and fell hard after the spring washout of Nasdaq companies. The stock closed at 9 cents a share Dec. 26 and didn't open Dec. 27 after the liquidation announcement. Quepasa recently was told it would be delisted from the Nasdaq if the stock didn't bounce above $1. The company tried desperately to save money and stay in business. Two layoffs this year chopped its staff from more than 100 to 20. ``After carefully evaluating every option to maximize shareholder value over the past nine months, our board of directors has determined that liquidation following the sale of our assets is the best way to maximize value and provide liquidity to our shareholders,'' chief executive Gary Trujillo said in a company statement. Quepasa was backed by such nontraditional Net investors as board member Jerry Colangelo, owner of the Phoenix Suns and Arizona Diamondbacks. The failed venture followed an old Internet playbook trying to build its business. It launched, then unleashed a barrage of advertising aimed at building its brand. It paid $2 million to singer Gloria Estefan in a failed sponsorship deal, money that might have seemed like an extravagance as the company's struggles grew. Quepasa's game plan was in favor a couple years ago but has grown shopworn as investors demand that Web companies show some ability to make money. ``I've never seen anything like this before, companies with no business model getting funded,'' said Dawna Paton, a former venture capitalist and a partner at the Gantry Group, a Concord, Mass., Internet professional services company. ``It's true across the board for almost every single dot-com. They didn't take time to check out what the market wants.'' Quepasa also may have misread Internet use in its target market. It tried to remedy that by giving away computers and offering free Internet access through partnerships on its site. Powers, though, said Quepasa did nothing more than what the marketplace encouraged: Go public and spend. ``It's easy to say and very obvious; they spent tens of millions of dollars, and it has not resulted in a profitable business,'' he said. ``The truth is that if they hadn't done it with a big splash to attract that market, somebody else would have.''