How can a website or a firm bankrupt

The story of the greatest failures of the Web, shows how large companies can invest millions in buying a company that will be closed or sold then for nothing, failing to exploit their potential.

Web site failing

The reasons for these failures are varied. For some it is a total apathy, which makes the site disappears for lack of renewal. Others try to maximize advertising revenues to such an extent that disgusted users prefer look elsewhere. Again others have based their business on an economic model too random.

Motorola Mobility

Acquired by Google in 2012 for $ 12.4 billion, it is sold to Lenovo in January 2014 to 2.91 billion dollars. It had already sold a part of the activity, Motorola Home, to Arris for 2.35 billion.
Although Google keeps the patents, 15000 out of 17000, it is more than $ 7 billion for a portfolio that has never bothered Apple nor Microsoft currently.
But perhaps the various tax benefits of the transaction will offset the loss.
It is perhaps not a financial failure, , besides the advantage to counterbalance the importance of Samsung, but rather in the fact that Motorola devices have had no success.


The site had received 45 million investment fund by the founders of LinkedIn. Google wanted to buy it 200 million four years ago. It was sold $ 500 000 to Betaworks in July 2012. It seems that besides the site itself, different parts from the firm were sold to multiple players for about 16 million. We can talk about butchering.
One can get an idea of ​​the value of a site knowing that it receives 7 million visitors per month (against 30 in 2008). It seems that its past drop in traffic was due to competition from Facebook and Twitter, but in fact much of the hearing was postponed to Reddit after Digg has changed its rules for selection of posts to a limited number of sources, leaving to the "friends" of the visitors care to provide the links that concern them most. In doing so, the site has lost a community that it had to the benefit of a community that he had not and actually resided on Facebook. Also the desire to maximize advertising revenues in the manner of MySpace finished scaring off visitors.
It has been said that FB and Twitter killed Digg, that is wrong. Reddit either, when a ship gathers the survivors of a shipwreck, it does not mean it is the cause of this wreck.
Betaworks does not keep the staff, it has its own team to replace it (Washington Post got it).
The founders could console themselves by noting that the hearing of Reddit also is stagnating for months.

AT&T and T-Mobile

When AT&T signed a contract to acquire T-Mobile, there was a $3 billion of breakup fee included in the agreement. Now the bid is cancelled (due to Justice Dept. opposition) and T-Mobile is happy do get the $3 billion and started to make mass investments! They no longer need to be acquired.
But AT&T shareholders are less happy...


Hewlett-Packard spent $ 1.2 billion to buy Palm, smartphone manufacturer. But what interests us especially in this purchase, the firm proclamaid is WebOS, the multitasking operating system.
Unfortunately the first WebOS tablets are unsaleable, Best Buy wants to return more than 200,000 units to the manufacturer.
On August 19, 2011, HP announced the end of WebOS tablets and smartphones. The company even wants to cease production of computers and focus on the software! 
Now webOS is open-sourced and may have a future (free for anyone), but what about the investment in Palm?

Bebo and AOL

AOL bought the social network Bebo, Facebook competitor, for $ 850 million in 2008. Two years later sold it for less than $ 10 million.
Steve Case, one of co-founders of the company, posted a tweet about that.

Previously it had bought Netscape for $ 4.2 billion. The site was subsequently closed and the code of the browser became open source.

In 1998 it bought the mail client Mirabilis ICQ to 287 million. Sold it for 187 million in 2010.

Geocities and Yahoo

The social hosting site founded in 1994 was acquired by Yahoo in 1999 for $ 4.7 billion. (Source: PC World).
In 2011, it is simply closed.

A similar fate was offered to Delicious, which was sold in 2011.


This social network site was the third in the world before gradually losing its audience primarily for the benefit of Facebook.
The reason for the decline of MySpace is known, the company Newscorp of Rupert Murdoch, who bought the site in 2005 wanted to maximize incomes and exposed quantity of pages whose sole purpose was to display advertisements. For the user it was painful.
Newscorp is now looking to sell the site, after having pressed users like a lemon, for a small fraction of its purchase price.
In 1993, RM had bought the ISP Delphi (not related to the IDE), popular at the time, but which disappeared thereafter.

Bought $ 580 million by NewsCorp, the MySpace site would have been resold 35 million to Specific Media in June 2011. Even if Newscorp made lot of advertising revenue, the losses have been steadily increasing.
And we can compare the price to that to the estimated present value of Facebook is between 50 and 100 billion dollars!

Demand Media

The firm that manages a number of farms, including eHow, received $ 355 million in capital venture. It makes its income from pages made only to display advertisements.
On April 11, 2011, after a change of the Google algorithm, investors have lost in one day almost half of their bet.

Share price of Demand Media in 2011


This search engine worth billions on the stock exchange in 2000. But leaders have found that employees preferred to use Google, which was simpler.
In fact the engineers of the firm wanted to implement in Inktomi the same elements that made Google more pleasant for users. What the leaders found too expensive.
Their reaction? Prohibit employees from using Google.
Inktomi was bought by Yahoo in 2002 for 235 million dollars, 147 times less than what it worth in March 2000.
A part of its code has been open sourced in 2009.

Corel and Novell

Novell, publisher of popular server until Microsoft can make it uncompetitive, bought the WordPerfect word processor $ 800 million in 1994. Two years later sold it to Corel for $ 200 million.
A few years later, Corel itself has sold as a whole for 200 million too.