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Summary:

Updated, Monday, 7.30 PST: Personalized web page startup Pageflakes has run into trouble and is desperately seeking a buyer, according to our sources. The company is rumored to be running low on cash and will join the dot.gone club unless it can find last-minute buyers. I […]

Updated, Monday, 7.30 PST: Personalized web page startup Pageflakes has run into trouble and is desperately seeking a buyer, according to our sources. The company is rumored to be running low on cash and will join the dot.gone club unless it can find last-minute buyers. I am told that there are a couple of interested buyers, though they are not big spenders.

Pageflakes CEO Dan Cohen, formerly of Yahoo, denied that the company was running out of cash. He invited me to a fancy lunch and offered to pay with the company company card. “All startups are up for sale! We frequently receive inbound M&A inquiries,” he said.

However, my sources are fairly confident about the tough times facing the company, which was founded in Germany and is headquartered in San Francisco.

The company was co-founded in October 2005 by Christoph Janz, Omar AL Zabir, Ole Braundenburg and Shahedul Huq Khandkar. Benchmark Capital Europe invested $1.3 million in Pageflakes in May 2006, and followed up with a $2.8 million bridge.

Even though Cohen denies running out of cash, our sources tell us that their burn rate is over $300,000. Given that the company had little to show in terms of revenues for 2007, simple math shows that they are skating on very thin ice. Simply put, they’re in urgent need of fresh cash, but given the state of their traffic, that looks like a long shot. Pageflakes had around 1.5 million visitors a month and over 200,000 registered users. Those are remarkably low numbers, making it tougher for them to compete with their rivals, which explains why Pageflakes’ recent attempts to raise capital have come to naught.

Pageflakes’ closest rival is Netvibes, a Paris-based company that has had its own set of challenges. Of course, the real competitors for these personalized web page startups are the Internet gorillas – Google, Yahoo, Microsoft and AOL – which are offering their own version of personalized web pages. (Read: WebWorkerDaily’s review of Top Ajax Start Pages.)

Pageflakes is just the tip of the iceberg: Many 2005-2006 consumer web startups that have failed to grow real-big-real-fast will find life increasingly tough, with many facing the fate of Pageflakes. Stay tuned!

Updated: Last evening we got an email from Cohen in response to our questions. Here is essentially what he said.

We don’t give out financials, but the liabilities we have are typical for a startup, we always make payroll, and we’re mostly current with our vendors. I won’t comment on the amount you state other than to say that’s it’s not too bad for a VC-funded startup! We’re out raising capital, and as you know the market is tough, and we haven’t closed a new round. Our current VC continues to be supportive.

This morning, there are reports that Live Universe is buying them. Given that Brad Greenspan’s roll-up vehicle buys web companies on the cheap, it is clear Pageflakes didn’t get a premium. Newsgator was another bidder and offered close to half a million dollars. Since Live Universe hasn’t issued a statement, plain math showed Pageflakes was going to be part of the dot-gone club.

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By Om Malik

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  1. Pageflakes is alive and well! Thanks for the extra traffic boost – according to you, we could use it ;-)

  2. Also…for another point of view, check out the recent PC Magazine “Best Start Page” shootout of Pageflakes vs. the “Internet Gorillas” – Editor’s Choice! http://www.pcmag.com/article2/0,1759,2265800,00.asp

  3. I don’t know enough business jargon to dispell any and all myths but I know that I love Pageflakes and am still telling people about it on a regular basis and meeting satisfied users. But I’m sort of a Pageflakes t-shirt wearing groupie… so maybe I’m biased. But then again… maybe so are your sources? Just sayin’…

    As for competitors like Microsoft all I can say is that if their version of personal web pages are anywhere near as touchy as their new operating system then Pageflakes has nothing to worry about! LOL Oops… I meant to just say how much I loved Pageflakes and I accidentally got off onto how much I love Apple and how much I hate Microsoft!

  4. Barney Lerten Sunday, April 13, 2008

    I happen to love PageFlakes and hope it survives and thrives. It deserves to. It feels a lot more comfortable to me than many of the other RSS/customized home page mashups. (It’s not perfect – none of them are!)

  5. This is the sort of content I’d expect to see on ValleyWag, not GigaOm.

    I’d rather not read speculation on which Web 2.0 startup is running out of money.

  6. Knowledgeable insider Sunday, April 13, 2008

    My sources tell me there is a new whole-new iGoogle coming out too.

    Going out of business tomorrow might do them a favor – save the agony of dying a slow death and just getting the inevitable over and done with.

  7. Grandma Sher Sunday, April 13, 2008

    What a mean spirited set of rumour driven comments. Why not praise the site for its innovation, ease of use and forward thinking execution. One should compliment, and highlight its successes, not prattle about it demise

  8. I’ll believe it when I see it… PageFlakes spanks the competition in terms of flexibility and ease-of-use — methinks rumors of their demise are greatly exaggerated.

  9. I like Pageflakes and as a matter of fact I know that my colleagues at school like it too. It would be a shame to see it go.

  10. Marc’s Voice » Blog Archive » Even more mid-April blogging ’08 Sunday, April 13, 2008

    [...] Did anyone out there think there was room for more than one NetVibes? I gotta wonder what Pageflakes’ VCs were thinking. [...]

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