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Gigaom raised $22 million, but failed.
WASHINGTON, DC: The collapse of GigaOm, an influential technology blog and news site launched by Indian American blogger Om Malik, has sent shockwaves across the tech media circles.
A note posted Monday on its website stated, “Gigaom recently became unable to pay its creditors in full at this time. As a result, the company is working with its creditors that have rights to all of the company’s assets as their collateral. All operations have ceased.”
Gigaom went out of business after raising $22 million in venture capital money in roughly eight years. In February 2014, it had raised $8 million.
Some analysts see its failure as a cautionary tale for start-ups eager to raise and spend VC money.
“Unlike ad-based media companies, GigaOm was determined to avoid the trap of digital advertising, with its associated pressure to chase low-valued page views,” wrote the media and marketing website Digiday.com. “Instead, it sought to use its content to cultivate a relationship with an audience in order to sell them tickets to events and research.”
“[VC funding] definitely is a Faustian bargain,” Gigaom senior writer Mathew Ingram told Digiday. “It’s basically a shortcut to growth.”
Hours after the site ceased operations, many were mourning its demise.
“In traffic, it lagged behind its more breathless rivals, including TechCrunch, Mashable, and Business Insider,” wrote Slate’s senior technology writer William Oremus. But it did good, honest work, and it cultivated skilled journalists who knew what they were talking about. In an ideal world, that would have counted for more than it apparently did.
Gigaom had acquired PaidContent, which covered the digital media business, in 2012. PaidContent was founded by Indian American journalist Rafat Ali.
The Delhi-born Malik launched Gigaom as a blog in 2001. He left his job to run the site full-time five years later.
Malik left Gigaom at the beginning of last year to join True Ventures as a partner.
“Now that Gigaom is all grown up, it’s time for the next chapter,” the headline of a post that announced his departure read.
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