Slashdot Mirror
X10 Files For Chapter 11 Bankruptcy Protection
telstar writes "As a followup to the recent Slashdot story about X10 losing a $4.3 million patent infringement suit over pop-unders, X10, the wireless camera company that 'only last year billed itself as the world's largest online advertiser', have filed for Chapter 11 bankruptcy protection. This allows them to continue to operate, but they'll be shielded from creditors while they reorganize their finances - so rest easy, X10 popups are here to stay."
Don't take a risk you can't afford to lose.
Dumbasses.
Now really, is there anyone who reads Slashdot that is still dealing with popups? Between builtin popup blockers in the Mozilla family, Safari, and Opera and the Google Toolbar in IE why would any self-respecting geek ever have to see an X10 ad?
Generally, the large creditors share the assets at approximately the percentage that they're owed.
;)
So, I'd expect those brothers -- who are owed $4.5 mil or so to get $.1M - $4.5M ($.1M if $1M assets, $50M debt; $4.5M if $10M assets, $10M debts). Of course, if the company had exactly $10M of debts and $10M of assets, the CEO would kick in a penny and avoid bankruptcy...
Of course, IANAA, IANAL, IANACFO.
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Well it sounds like they didn't actually spend lots of money on the web advertising campaign - the lawsuit that triggered this bankruptcy was by a pop-under company suing x10 for unpaid bills (among other nonsense). In a strange way it's a karmic balance for x10 to go bankrupt depriving some pop-up "innovators" from getting their bounty.
Having said that, x10 was amazingly successful at their campaign - from a collection of fringe items by a company that no-one knew, to millions in sales and a company whose name we all know well. I also think it's a bit foolish to demonize x10- x10 didn't put ads on the sites you visit--The site put ads there (well, apart from gator but that was a prior story). If you don't like the pop-under ads at a site, blame the site itself not the people paying the bills.
Ofcourse, research has shown that the people least likely to spend money are the rich. They just hoard money, they don't spend it. Ofcourse, this makes sense, since you can't get rich by spending money. Sadly, it also means that the "waterfall" theory is just that, a theory.
Even before the pop-unders x10 had an overly enthusiastic sales group: Everything is always the final few days of some Earth shattering never to be repeated sale....oh demand is so high we've extended it for another week... Even looking at their site right now I see the classic "Hurry - Ends Tomorrow!". Yeah, okay...
Agreed, but I'm talking about the big internet companies whose entire business plan was basically to generate as many hits as their hardware would allow, then sale ads based on those numbers. The ones who would then do shit like buy $90,000 sports cars and have them painted with their "edgy" color schemes and give 3 away a day for a month and other dumb crap. (Maybe not a true example, but not far from base). A lot of sites got away with doing the ads only thing for a while, but unless they either stayed very small (think in terms of overhead. Slashdot, for example, seems to get a good financial kick from adds, but they don't really offer a huge amount of services or have a huge number of employees making making mega salaries, or piss off insane amounts of money on adds), or branched out to other, stable revenue generating ideas (Yahoo, where everything was once free, now has their hands in about 10 different cash generators), they died (most everything else).
Request: ECM unit, 1000 km fullerene cable, 1 tactical nuclear weapon. Reason: Birthday party for foreign dignitary.
I think companies that persist in using irritating advertising simply have ignorant marketing staffs that look at the wrong metrics when calculating ROI for the advertising dollars. X10's folks no doubt were looking at stuff such as the number of "impressions" or sales per advertising dollar spent & neglecting to do focus group research.
Here's how I see it. (And remember, we're talking advertising & marketing people, a great number of whom ain't very bright. If you get a 1% conversion ratio on 100,000 pop-under ads it yields the same number of sales as a 10% conversion ratio on a print ad that reaches 10,000 people. And the pop-unders are cheaper to produce & deploy. Never mind that the pop-unders also convert viewers into enemies of your company at a 5% rate while print ads have almost a 0% negative conversion ratio -- that's not the kind of metric ad people look at (or want to think about) very often, if at all.
"Obviously, I'm not an IBM computer any more than I'm an ashtray" (Bob Dylan)
It will be a shame to see this company go. Seriously. So they used pop-up and pop-under advertising -- so what? Lots of companies do. At the end of the day, they still sold home automation gear at great prices. I hooked up my entire home using their products, didn't spend a lot, and it's wonderful to use. With the X10 company gone, I will have to turn to Lutron, Smarthome, or other more expensive makers of X10 gear.
:)
Or we could all just upgrade from X10 to X11. I hear the upgrade lets you run graphical applications remotely.
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Perhaps as a percentage of income, but I'm sure someone that is earning a cool million per year is spending more than someone who earns $30k per year. That the rich don't spend all their money just makes sense... you can't get rich if expenses=income, and at some point you literally run out of things to buy.
Sadly, it also means that the "waterfall" theory is just that, a theory.
Wrong. Money in the bank stimulates the economy too because it makes money available to institutions that can loan it to yet others which in turn stimulates the economy. Put it this way... if the rich spend all their money buying things then existing businesses are helped. If the rich "hoard" it then the banks have more money to loan which helps new businesses get off the ground and helps many individuals be able to get an affordable loan to buy their first house, etc.
So, basically, it's win win. Save it, spend it. As long as it stays in the economy and provokes economic activity it's a good thing.
Correct me if I'm wrong, but I don't think you can declare bankruptcy just because debts > assets. Many people and companies have more debts than assets. I believe the deciding factor is if there is no reasonable way you'll be able to pay your debts. If you have assets of $10M and debts of $10M and income of $5M I doubt you'd be able to get a court to allow you to file for bankruptcy since there's a reasonable expectation that you'd be able to pay your debt off in a few years.
Of course I could be wrong.
October 7: X-10 loses the lawsuit. Compensatory damages are $4.3 million. The punitive damages hearing, where the huge dollar figures are likely to be determined, is to take place October 22.
October 8-20: X-10 and its lawyers think about how to generate the most sympathy for their plight -- specifically, how to make themselves sound pathetic so that the jury will keep the punitive damages figure low.
October 21: X-10 files for bankruptcy the day before the punitive damages hearing was to take place. But they don't really file for bankruptcy: As the CNet article states, "X10 filed what the bankruptcy court termed a 'deficient' filing, meaning that it lacked a statement of its financial affairs." In other words, X-10 is a privately held company, and like any private company it doesn't want to divulge its financial affairs. So it claims that it's filed for bankruptcy, getting all the PR benefit of a true filing without any of the real costs, such as having to disclose private financial affairs.
The best estimate of their debts that they can come up with is between $10 million and $50 million? They really have no idea whether they owe $10 million or $50 million??? Or maybe they just prefer not to say -- and why would you specify your debts publicly if you didn't have to?
I bet they never complete their bankruptcy filing. It seems like nothing more than a tactical maneuver to keep the overall damages low.