Blog Post

Clock Ticking On Pageflakes?

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. [digg=]

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.

47 Responses to “Clock Ticking On Pageflakes?”

  1. 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….

  2. Non-Linear Being

    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…

  3. Non-Linear Being

    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.

  4. 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!

  5. 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.


  6. @ 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.

  7. @ 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.

  8. 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 ( 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….

  9. 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.

  10. 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,, 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.

  11. 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.

  12. 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
    Public Service Officer
    Los Angeles Fire Department

  13. David Marks

    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.

  14. whatnot

    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.

  15. Grandma Sher

    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

  16. Knowledgeable insider

    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.

  17. 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.

  18. Barney Lerten

    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!)

  19. nancypants

    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!