ADOTAS — After raising $150 million in debt and equity financing and integrating five mergers and acquisitions over the last decade, the online media shop that provided free downloads of games, music and other content in exchange for the ability to serve ads is no more.
Related story: CEO filed bankruptcy
According to some detailed blog posts by co-founder and CTO Ken Smith, Zango got in trouble by screwing up its distribution, financing its acquisitions with too much debt, being unfairly charged with affiliate commission stealing and failing to deliver adequate value in exchange for the advertisements. There were also accusations of illegally installing software. (via peHUB)
On the positive side, according to Smith, Zango made some great acquisitions, including LoudCash, Hotbar, and SmartShopper, and developed a unique and innovative business model. The company also had great employees and culture. That will mollify the investors.
Blinkx, a video search company, bought 10 percent of Zango’s assets, banks foreclosed on Zango, with the company still owing $44 million. The company never returned phone calls.
Zango shut its shop in Tel Aviv January, so problems were on the horizon, 51 Zango employees were affected by that closure. In June, Zango laid off 75 workers, 20 of whom were based in Israel, blaming the grim economic climate on the firings. The final end might have seen 90 employees lose their jobs.
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