Dying Dot-Com's Final Stop: The Auction Block

Category: World Affairs Topics: California, Hayward - California Views: 710
710

HAYWARD, California, Feb 21 (AFP) - When a dot-com company dies, everything gets left behind: from scotch tape dispensers to table soccer games to expensive high-powered computer gear.

And with dot-coms dying now at a rate of more than one per day, these high tech skeletons are starting to pile up, creating a windfall for Silicon Valley's high-tech grim reapers: the asset auction companies.

"Times are quite good for us now," chuckled a sweating Ross Dove, 49, auctioneer and CEO of DoveBid, a Foster City, California asset auction company that, since 1937, has been selling off to the highest bidder the remains of companies that have gone under.

Tuesday, Dove and a crowd of 150 bidders gathered in Hayward, California to pick the bones of AllAdvantage.com, a 110 million dollar-plus 1999 start-up that was going to pay Web surfers money to visit other company's Web sites.

Funded primarily by Korea's Softbank Ventures, the company hit a wall in June, 2000, when venture capitalists refused to hand over more funding. Shutdown came just before Christmas.

The auctioneers appeared at the abandoned 74,000 square-meter (800,000 square-foot) company headquarters this weekend, labeling and stacking piles of laptops, an Asteroids arcade machine, tables crammed with laser printers and acres of cubicle walls.

"This is some decent stuff," said Nicholas Claric, picking through a table of used desktop computers on behalf of his cell phone company.

He sighs when he comes upon a computer with someone's cartoon stickers on it.

"I get sad when I see stuff like this," he said, fingering the decals. "But then, I figure someone will buy it, and life goes on."

Albert Golukhov, a Russian immigrant who runs his own dot-com consultancy, has already been to eight dot-com auctions since last September, equipping his new Internet services company with the circuit board corpses of failed Silicon Valley companies.

"Most of these companies weren't businesses," said Golukhov.

"They were run by young executives who worked for Cisco or Intel and didn't know how to get something going from nothing."

Golukhov said he's keeping afloat because most of his programmers, a high payroll item here, are being hired and kept working in the former Soviet Union.

"Programmers are very expensive, except in Russia," Golukhov said. "These dot-com people didn't think about running a business like that."

What Golukhov labels incompetence is fast becoming the auctioneer's pot of gold.

According to WebMergers.com, a consultancy that tracks Internet mergers and shut-downs, at least 49 dot-com companies closed in January, with some 270 closing down since January of 2000. Seventy percent of those dot-com closings have occurred in the last four months, WebMerger's study found.

And Dove believes that's only the beginning.

"I don't think we've seen even ten percent of the dot-com closings," said Dove, stamping out a cigarette to return to the gavel. "I'm predicting at least DOL3 billion in assets will come out of this sector once its all said and done."

Inside AllAdvantage's former headquarters, bidding begins. As bidders wave and Dove hawks their wares, the company's founder, Carl Anderson, leans against a deserted cubicle wall, looking stricken.

"I really can't talk about this yet," he said. "I just can't."

Near an exit sits Lot 1001, a forlorn collection of desks, chairs and some white boards. "How can we make money by ..." someone had scribbled across the board, probably during one late-in-the-game meeting. The rest of the question, and any answers, are smeared.


  Category: World Affairs
  Topics: California, Hayward - California
Views: 710

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