The end of Bellevue, WA-based Action Engine is near. We are expecting to hear more about the situation soon, however, a person close to the company confirmed that on August 12 all of the employees were furloughed, and then two weeks later on Aug. 29, they were officially laid off. Since the mysterious closure, company executives have been busy trying to sell the company. One of the leading candidates is Movius, which was a partner of the company and provides infrastructure to carriers. Also, it was rumored that at some point, Everypoint, also looked at the deal.
More after the jump…
Action Engine develops “on device portals,” which provides a platform to content companies to launch mobile applications with advertising support. The timing of the company’s collapse is odd given that in a July 22 press release, the company rattled off an impressive list of accomplishments, which included partnerships with big-name brands, such as *AOL*, MSNBC and Sports Illustrated (the release is no longer available on the company’s site). It was also rumored the company was working with MySpace and MTV and VH1. Through its partnership with Movius, it gained access to carriers.
Still, the company’s past is hardly spotless. In July 2007, the company raised $20 million from investors, including Baker Capital, Northwest Venture Associates and The Spangler Group. However, former investors, like *Intel* and OVP Venture Partners declined to participate in follow-on rounds. In a Seattle Times article, OVP’s Chad Waite said: “We lost confidence that the company was going to be able to develop a product on the amount of money that it would take to make a return on the investment…It was too long of a road.” In total, the company has raised about $65 million. Action Engine’s CEO Scott Silk, who joined the company in 2004, said in the same article: “The company had a brilliant idea but it was early to market. Do you shut a company down because they are doing it right but it’s early? No.” But apparently, that’s what’s happening. It’s unclear exactly what went on, but is it possible that the newer investors also got impatient? Was the mobile-advertising market not as active as they wished? “We had the top flight customers, and we had a lot of great exposure, but in spite of it all, it boiled down to strategic choices that were made, and they didn