The abrupt shuttering of Om Malik’s leading technology blog, GigaOm, on Monday caught many by surprise — even its own media writer didn’t see it coming.
“Like many of my former colleagues, I am still trying to process all of the feelings and thoughts its closure has triggered and understand why and how it happened. I consider this post part of that process — I’m certainly not claiming to have any definitive answers, if there are any,” GigaOm’s media writer Matthew Ingram wrote on Saturday.
Ingram wasn’t alone. According to Recode, the company had been struggling financially for two months but had not made that public. It all came to a head when last weekend, GigaOm’s investors failed to sell the company and then decided to take it over.
From CNN to the New York Times, media writers scrambled to figure out what had gone wrong for the site that attracted more than 6 million readers monthly between Monday morning when articles continued to post and later that same afternoon when Malik announced its closure, which would layoff about 70 employees.
“GigaOm is winding down and its assets are now controlled by the company’s lenders. It is not how you want the story of a company you founded to end,” the tech blog’s founder wrote.
Founded in 2006, GigaOm not only provided consumer-facing content, but it also ran several high-cost tech conferences, performed white paper research and sold advertising. Despite raising $40 million with a recent $2 million more, the company found itself unable to pay vendors for a conference set for next week, which was the impetus for trying to sell the company last weekend.
After having the week to reflect on GigaOm’s closing, Ingram explained that it came down to several factors, including its reliance on venture capital funding, taking on debt from bank loans and other lenders, and increased competition for advertisers against “behemoth” sites like Buzzfeed and Vice, as well as a lack of revenue from the research arm of the company that would’ve helped it stave off its venture capital funders and loan debts. And, maybe, Ingram wonders, the site just grew too fast.
“Some have argued that GigaOm was guilty of an excess of hubris, and that instead of trying to grow into something so quickly, it should have taken the slower approach,” Ingram posed.
As for the future of GigaOm, Malik has said that he has no idea what the lenders will do with the company and its assets, but a bankruptcy filing is not being planned. Recode reports that the investors are still looking to sell the publication with individuals attached to GigaOm naming Time Inc., International Data Group and O’Reilly Media as interested parties.