Layoffs and Withdrawal from South Korea
Aug 1st, 2010 by admin
Following the recent shutdown of Dealstreet, penny auction pioneer Swoopo continues to downsize: First one CEO left , then a second . Now the long time CFO is also heading out in the direction of 1-2-3.tv (German press release ). But even before that, evidently a whole lot of other managers have needed to bow out. Furthermore, Swoopo is not active in South Korea anymore.
Picture of Swoopo Continues to Downsize: Layoffs and Withdrawal from South Korea [source:excitingcommerce.com]
Swoopo CEO Frank Han has been primarily occupied with revamping Swoopos business model and defending it against waves of competitors. Apparently without success.
With its novel bidding model, Swoopo (formerly Telebid) was once the talk of the town and triggered a true penny auction boom . It has however always been more of interest to investors rather than the users themselves.
MadBid received $6 million recently from Skype founders (see press release). BigDeal started in December in the US with $4.5 million. Before that, Swoopo had raised $10 million from August Capital.
The Swoopo model is very well suited for pulling in users but does not do well to keep them in the long run. Therefore the view from Exciting Commerce is that in the long run, an auction model with falling prices has better potential than a model with rising prices. This is on the other hand not so attractive to investors, who are generally concerned with lack of traction in comparison to the Swoopo model. Will be interesting to see who here breaks the Catch 22.
Editor's Note: Interesting commentary to be found in German on the German language blog post. Roughly translated here.
Top 500 Shops: Swoopo Nabs 10 Million in Financing Swoopo Bids Farewell to Its CEO Swoopo Loses Another CEO Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo. [source:excitingcommerce.com]
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