SAN FRANCISCO – Three young entrepreneurs who struck it rich during the dot-com boom took a stab at capitalizing on the high-tech crash Friday by paying $2.4 million for online photography site Webshots — the same service they sold to ExciteAtHome for $82.5 million in late 1999.
Webshots co-founders Andrew Laakmann, 32, Narendra Rocherolle, 33, and Nicholas Wilder, 29, reclaimed ownership of the service when U.S. Bankruptcy Judge Thomas Carlson approved the sale as part of ExciteAtHome's liquidation. Redwood City-based ExciteAtHome plans to go out of business in March.
For ExciteAtHome, Friday's deal represented another humiliating reminder of how badly the Internet economy has crumbled since the company went on a multi-billion-dollar shopping spree in the late 1990s.
Before selling Webshots at a 97 percent discount from the price it paid in October 1999, ExciteAtHome sold Excite.com for $10 million and let go of online greeting card service Blue Mountain for $35 million. ExciteAtHome paid $6.7 billion and $780 million, respectively, for those two sites in 1999.
For Laakmann and his partners, the Webshots deal represents a golden opportunity to keep their creation alive and make even more money than they already have.
"We're very excited," Webshots CEO Laakmann said Friday. "We love what we do."
The partners predict that Webshots will be making money within 60 days. They believe their confidence is well-founded because they say the site became profitable soon after it started in 1996.
To generate revenue, Webshots plans to charge fees for some services. The rates have yet to be determined. Many services will remain free for the site's 13 million registered users, Laakmann said.
After selling Webshots, the three co-founders continued to work on the site as ExciteAtHome employees. Although reluctant to criticize ExciteAtHome, Laakmann acknowledged they had become frustrated under the new ownership of a larger company.
To buy back the site, the Webshots co-founders formed a limited partnership called Two Fold Photos — basing the name on their desire to run their company again. "We felt very confident we were going to get it back," Laakmann said.
When it bought Webshots, ExciteAtHome paid the Laakmann and his partners in stock — a currency that plummeted from a split-adjusted high of $59.75 in late 1999 to 15 cents before the company's September 2001 bankruptcy filing.
The Webshots partners sold some of their ExciteAtHome stock, but won't say how much money they made. They didn't have to share their windfall with venture capitalists because they kept the startup's ownership among themselves and a few friends and family.
"Let's put it this way: We made enough to buy back our company for cash," Rocherolle said with a sly smile.