Geeknet

» see geek.net as it lived, on the wayback machine

~ the last words ~

If you installed open source software between 2000 and 2010 you downloaded it from SourceForge, and that was as true on a university connection in Ankara as anywhere else. It was the default distribution point for a decade, the place a project put its tarballs because that was where people looked, and it stopped being that for reasons that are mostly about who ended up owning it. Almost nobody using it thought of it as a company's asset. It was, and the company was this one.

VA Research was founded in November 1993 by Larry Augustin, then a Stanford graduate student, with James Vera. The business was straightforward and good: build personal computers with Linux already installed and sell them to people who wanted a Unix machine without paying Sun or SGI workstation prices. It worked. By 1998 the company was doing over $100 million in sales at a ten percent margin and held roughly a fifth of the Linux hardware market, and Intel and Sequoia put money in that October.

In the summer of 1999 four of its programmers designed SourceForge, which went public at Comdex on 17 November. Three weeks later, on 9 December 1999, the company went public too. It priced at $30 a share and opened at $299, closing the first day at $239.25, which was 698 percent above the offer and the largest first-day gain the American market had ever recorded. Augustin was a paper billionaire by lunchtime. In February 2000 the company bought Andover.net for $800 million and acquired Slashdot, freshmeat, linux.com and ThinkGeek in a single transaction.

Then the market turned and the actual business turned with it. Dell started preinstalling Linux, which removed the reason to buy a workstation from a specialist, and on 26 June 2001 the company left the hardware business entirely and dismissed all 153 hardware employees. The stock was $8.49 by December 2000 and $1.19 by December 2002. What followed was twelve years of a company that owned the best-known properties on the technical internet and could not work out how to make them pay, selling them off one at a time until there was one asset left.

~ the record ~

~ the 698 percent day ~

The 9 December 1999 IPO is the single cleanest artifact of the bubble that exists, because the number is unambiguous and the record still stands from that morning. Shares offered at $30 opened at $299. The company raised $132 million and left roughly a billion dollars of first-day appreciation on the table for whoever got an allocation, which is another way of saying the bankers priced it at a tenth of what the market would pay and nobody involved thought that was strange.

A 26-year-old web developer on staff was quoted saying she was worth $10 million on paper. That quote dates the period better than the billion does. The stock peaked at $242.88 on 17 December 1999, eight days after the IPO, and it never traded near that again.

The fall was as documented as the rise because the company stayed public through all of it. By August 2000 the shares were at $40 and only 24 mutual funds still held them. A year to the day after the IPO they were $8.49, and two years after that, $1.19.

~ four names ~

VA Research became VA Linux Systems in 1999, VA Software on 6 December 2001, SourceForge Inc. on 24 May 2007 and Geeknet in November 2009. Each rename was an honest description of what was left after the previous business had been closed or sold, which makes the sequence a fairly precise record of a company retreating from hardware into software into media into retail. The Japanese subsidiary kept the VA Linux Systems name and outlived all four.

The properties went the same way. SourceForge Enterprise Edition went to CollabNet in April 2007. Slashdot and SourceForge went to Dice Holdings in September 2012 for $20 million, with Freecode in the same bundle, which for Slashdot alone was a remarkable comedown from an $800 million acquisition twelve years earlier. That sale left ThinkGeek as the only thing Geeknet still owned.

~ the last asset ~

Hot Topic bid $122 million for the company in May 2015 and GameStop came over the top at $140 million in June. The tender offer expired at 11:59pm New York time on 13 July with 86 percent of the shares in, and the acquisition closed on 17 July 2015. A company that began by building Unix workstations for engineers ended as a line item inside a mall video game chain, which then killed ThinkGeek's website four years later and kept the brand as a shelf.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »