YouTube long ago won the popularity contest for user generated video. Other startups, even some of the same founding generation, have been battling for second place or to just survive. Some like Grouper, reinvented themselves. Now, Los Angeles based Revver, one of the earlier competitors, appears poised to bow out of the race entirely.
Citing “sources familiar” CNET’s News.com is reporting that the company is in dire need of cash and may be sold for as little as $300 to $500k plus the assumption of an estimated million dollar debt. A price in that range would represent pennies on the dollar relative to total investment in the company.
Revver was founded before user-generated video truly caught on. The company tried to differentiate itself from competitors by sharing revenues 50/50 with video producers (after paying a fee to sites that embed and distribute the clips). The income was generated by putting pre and post-roll ads in the video stream. It was hoped the financial incentive would help build a high quality library of content and that in turn would draw audience.
In September, Revver announced they’d paid (PDF Press Release) out a million dollars in fees in their first year of sharing income. That news implied revenue of around $2.2 to $2.5m. That income is apparently nowhere near sufficient to cover their operating costs.
The Revver equation for drawing a crowd hasn’t really worked. While video quality was more often better than competitors, audiences didn’t sign on en masse. Monthly page views at Revver seem to total in the hundreds of thousands compared to YouTube’s hundreds of millions.
Rumors circulated a month ago that Live Universe, a website network from MySpace co founder Brad Greenspan, was interested. Microsoft was also named a potential suitor a year ago. Neither of those deals materialized.
Reports are that staffing has dropped more than 50% in the last 18 months and this new push for sale is a last effort by investors to salvage assets before shutting down the company and leaving it to the creditors.
If the fire sale proves true, it will be an especially bad start to 2008 for Ian Clark. Ian was one of Revver’s founders but left to start a Digg-like news aggregator site called Thoof in December 2006. A few weeks ago, news came out of Austin that Thoof too was on the block to the buyer with the best offer. That’s two potentially shuttered startups announced in the first five weeks of the year.
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