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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.

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 ;-)

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  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

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  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!

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  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!)

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  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.

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  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.

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  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

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  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.

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  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.

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  10. [...] 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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  11. There’s a real basic economic problem with these start pages. My Yahoo and iGoogle monetize through other services, but what is that for Pageflakes? You can only get so far with advertising and their distant also-ran status means that their traffic acquisition costs are going to be higher than competitors. Insofar as the social features, do you need another social network? I don’t understand this about Ginger either, why would I want another set of friends and followers to manage?

    I looked at Pageflakes a while back and thought it was nice, but if all I’m gonna do is read rss feeds, and that’s what most people are doing with these services, I really don’t care which one I use because they are all basically the same.

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  12. [...] was not huge – Pageflakes is in a highly competitive market dominated by Yahoo and Google. Even so, reports that the company may be going to the deadpool seem to be [...]

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  13. I am wondering what will happen to Netvibes then

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  14. Om,

    On my ‘new media evangelism’ travels across North America, I can confidently say that no one service seems to excite the room or convey the seemingly endless possibilities of Web 2.0 as does Pageflakes.

    Whether I’m conducting a hands-on lab to a dozen government execs, or speaking before a room of 600 conference attendees, there is nothing that brings forth a welcome nod of understanding or inspires a ‘can do’ attitude like a demo of Pageflakes.

    If it folds, I will be very saddened to see it go.

    Please keep up the great work – and stay safe and well!

    Respectfully Yours in Safety and Service,

    Brian Humphrey
    Firefighter/Specialist
    Public Service Officer
    Los Angeles Fire Department

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  15. [...] was not huge – Pageflakes is in a highly competitive market dominated by Yahoo and Google. Even so, reports that the company may be going to the deadpool seem to be [...]

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  16. [...] seems Om was not that far off. This is particularly interesting given the recent acquisition of Revver by [...]

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  17. Yeah. In real trouble. It will be tough spending all that money. Nice scoop guys.

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  18. Shocking that Pageflakes burns so much money, I know one of their competitor start pages, Protopage, managed to do the same thing self funded.

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  19. Whoever decreed that there could only be one player in any particular field? There are already dozens of home/start pages companies out there, and the field is dominated by a small number of them. Many people find that NOT using a product from one of the big 4 is quite appealing. Pageflakes is a good product, superior to others in the field and I can’t see it disappearing anywhere soon.

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  20. I read somewhere once from a VC that something like 80% of funded startups change their business plan from the time of initial investment to actually making it. So the question becomes is the take-off strip long enough to get a successful biz plan operational before crash & burn.

    We at Odysen, http://www.odysen.com, continue to move forward without funding as this personalized web page market continues to evolve and mature. Staying unfunded forces cash burn severely low, and while we can’t develop things as fast as we’d like, it more or less completely eliminates the fear of closing for lack of cash, only resources being sacrificed is evenings and weekends (our time), to develop the features (FWIW) we ourselves feel are needed.

    Lesson being stay unfunded as long as possible to find true biz model for given market.

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  21. [...] why is this coming now? Well, Om Malik says it well in a post about personalized web page startup Pageflakes, which is apparently running into trouble [...]

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  22. Aren’t 98% of all startups running out of cash at some point? Don’t investors always push the CEO toward continued rationalization of the business? BOOOORing story. NEWS FLASH: Potential Buyers sometimes spread rumors to help their negotiating position. Naiive/Lazy press often plays along.

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  23. [...] policy for non-profits (or anyone) Om Malik thinks Pageflakes is slipping down the [...]

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  24. Om, you are one of the true “real” journalists out here in this business…which is why I am so disappointed in you. Both you and Arrington (http://www.techcrunch.com/2008/04/13/pageflakes-acquired-by-live-universe/) report that NewsGator was one of the other bidders for Pageflakes…sounds like they simply got beat in a bid for Pageflakes. This whole story appears to be the pathetic attempt of NewsGator and your pal Jeff Nolan (ex-VC and NewsGator exec) to smear Pageflakes in revenge, spoil their deal, or some other nefarious purpose…and you let him get away with it. Shame, shame, shame….

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  25. @ Shiri

    Your point being what? I checked the facts and basically used extreme restraint when reporting this story. If you read the report, I added the Newsgator stuff this morning after it showed up in Tech Crunch. I reported on a development about a company that I have covered in the past, and this is part of the continuing story. Thanks for sharing your thoughts.

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  26. @ diamler,

    the cash situation here was pretty dire. ANyway after spending nearly $5 million, and only 1.5 million visitors a month to show for it, I don’t think rationalization is the right phrase.

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  27. Obviously TechCrunch had the real scoop. Om Malik, where did you get your facts? I am glad Techcrunch was there to keep you in the loop.

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  28. [...] Clock Ticking On Pageflakes? [...]

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  29. Pageflakes is my favorite breakfast food!!

    Global Warming Alarmists Beware… http://www.EvilCarbon.com

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  30. Hi Om,

    I couldn’t find a better way to contact you. Could you check out our Pageflakes-style site? I think it would be worthy of a review or mention, you would be the first to break our launch to the Valley.

    Thanks,
    Mark

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  31. I Love Pageflakes interface due to its design.It should not go.

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  32. [...] Pageflakes, according to TechCrunch’s unidentified sources. Just a few hours earlier, GigaOM reported that Pageflakes was “desperately” seeking a buyer. Last February, a number of sites [...]

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  33. [...] after speculations about financial problems and acquisition, Pageflakes has officially announced they’ve been acquired by Brad [...]

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  34. [...] has acquired Pageflakes, a personalized home page service that had been rumored to be in need of a buyer. Pageflakes competes with the giants–Yahoo, Google, Microsoft and AOL, as well as Netvibes. [...]

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  35. [...] has acquired Pageflakes, a personalized home page service that had been rumored to be in need of a buyer. Pageflakes competes with the giants–Yahoo, Google, Microsoft and AOL, as well as Netvibes. [...]

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  36. [...] after speculations about financial problems and acquisition, Pageflakes has officially announced they’ve been acquired by Brad [...]

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  37. [...] company blew through nearly $4.3 million and was close to running out of cash, as we first reported over the weekend. Their quick embrace of bargain-hunting Greenspan only adds credence to the rumors of them running [...]

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  38. [...] has acquired Pageflakes, a personalized home page service that had been rumored to be in need of a buyer. Pageflakes competes with the giants–Yahoo, Google, Microsoft and AOL, as well as Netvibes. [...]

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  39. [...] after speculations about financial problems and acquisition, Pageflakes has officially announced they’ve been acquired by Brad [...]

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  40. Sorry for being late for the show but I just became aware of the sale.

    With a light financial tool and work scheduling tool I could see a mashup like Pageflakes turn into an awsome tool for small to medium sized business networks. Maybe even a virtual ad agency!

    Reaching targeted niche markets with a systematic approach might have proven to be more effective in gaining a more rapid acceptance.

    Sometimes an audience can’t appreciate just how big some ideas are.

    The intuative, flexible and customizable interface is very elegant.
    Best luck to all involved with Pageflakes. You’re Awsome!

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  41. Non-Linear Being Monday, May 19, 2008

    There is no journalist objectivity or integrity going on here, at all. You’re unquestionably *enjoying* the plight of PageFlakes. Yes, this is a highly negative story, dare I say spiteful and condescending. You are not simply reporting facts, you are relating information with a celebratory “taint” that’s obvious to any human being not designed with a linear, mechanistic mindset. Do you step from in front of the LCD very often? Doubtful. And here we see one of the major downsides of the internet: Anyone at all can say anything, unrestrained, and be heard by eager tech dweebs. Even me. Reminds me suspiciously of being on the docks and tossing bread to the swarming carp: They are desperate to feed from what’s given them, regardless of the nutritional value.

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  42. Non-Linear Being Monday, May 19, 2008

    Oh, ho! Now I see “Shirl’s” comment from 14 April up there. And Om Malik’s curious response, thereto. Now it’s all very clear. Thanks for that, Shirl: The tone of this article makes *perfect* sense now. Indeed it does. Om Malik, looks like you need to do some reading from Sun Tzu’s texts, as your response to Shirl basically tells the non-programmers in the crowd that everything she’s saying is, in fact, true. Mr. Cohen, take heart in the subterfuge of thine enemies, for tables turn quickly in this world, and due deliverance eventually comes to all…

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  43. [...] don’t seem to have much traction. Recently, one of the more popular services, Pageflakes, ran into financial trouble /and was acquired by Live [...]

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  44. [...] Whatever you call it, Mippin needs to gain wide adoption in a crowded area to support its advertising-based revenue model. The market includes efforts by Yahoo, Microsoft and Google, and according to ad network AdMob — which does business with Mippin — the number of mobile portals is steadily rising (see graph). Obviously the mobile world cannot support 500 varying portals. Even in the PC web world, portals have problems. [...]

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  45. Wow, I don’t even have to be well up to speed on internet tech to see this article as the obviously biased, agenda-laden pile that it has turned out to be.

    It’s too bad its so hard to get accurate tech reporting – to many “religious zealots” ready to crusade for their preferred: broswer/OS/programs/etc.

    It is not August, Pageflakes still here, well rewiewed, beats out yahoo, LIVE and iGoogle in Lifehacker review….

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