Worldtalk

» see worldtalk.com as it lived, on the wayback machine

~ the obit ~

Corporate email in the early 1990s was not one thing. A company of any size ran several mail systems at once, usually because it had bought other companies or because different departments had chosen differently, and none of them could reliably reach the others. Mark A. Jung founded Worldtalk in Santa Clara in February 1992 to sell the box in the middle. The product was called NetJunction, it ran on HP's UNIX machines, and the company described it as a directory and messaging switch. What it did all day was translate mail out of one dialect and into another.

That business was real and it grew. Revenue went from $1.96 million in 1993 to $14.2 million in 1996, and the company took itself public on Nasdaq in April 1996 under the ticker WTLK, selling two million shares for about $14 million net. The filings also record the other half of the pattern: a net loss in 1993, in 1994, in 1995, in 1996 and in 1997. Worldtalk's own annual report puts it flatly, that the company had incurred operating losses in each of its fiscal years since inception.

In November 1996 it bought a company called Deming Software, not quite eleven months old, for $4.77 million and immediately wrote off $4.5 million of that as in-process research. What Deming brought was cryptography, and what Worldtalk built with it was WorldSecure, shipped in September 1997. The company called it a content firewall. It read every message coming in and going out, applied policy by sender or keyword, and scanned for viruses, which in 1997 was a thing almost nobody was doing at the mail gateway. By 1999 more than 400 companies were running it, Chevron and Nike and Time Warner and the United States Department of Energy among them.

~ the rap sheet ~

~ the receivable in tokyo ~

The decline has a specific first crack in it. Worldtalk's Japanese distributor, ASG, accounted for 18 percent of all license sales in 1998, and in the third quarter of that year the company terminated the relationship because ASG had not paid about $1.7 million it owed. That removed 18 percent of the license business and the cash behind it inside a single quarter, from a company whose total revenue that year was $13.4 million.

The numbers afterward tell the rest without commentary. Revenue was $11.3 million in 1997, $13.4 million in 1998, and $8.8 million for the first nine months of 1999 against $10.4 million in the same period of 1998. The accumulated deficit at the end of 1998 was $28.7 million. Eighty-three people worked there.

~ three dollars, then eleven ~

On 19 July 1999 Worldtalk closed a $10 million private placement with funds connected to Hilal Capital Management, selling 3,333,334 shares at $3.00 each plus warrants for 1,666,667 more. The stock had closed above twelve dollars in its first full quarter as a public company. Four months after that placement, on 18 November, it agreed to merge into Tumbleweed Communications at a fixed ratio of 0.26 Tumbleweed shares per Worldtalk share, which against Tumbleweed's price that week worked out to about $11.15. The investors who had paid three dollars in July were holding paper worth close to four times that in November, on a ratio fixed against a Tumbleweed share price that had its own late-1999 reasons.

The merger closed on 31 January 2000, by way of a shell company named Keyhole Acquisition Corp that merged into Worldtalk and disappeared with it. The Form 15 deregistering the stock went in the next morning, dated the 31st and signed by Tumbleweed's chief executive as Worldtalk's president. Where the form asks how many holders of record the company has left, somebody typed one. Tumbleweed itself was eventually absorbed into Axway, whose mail security product came out of a different acquisition entirely, and a search of Axway's own site for the word Worldtalk returns nothing at all.

~ what the encyclopedia says ~

Worldtalk has a Wikipedia article and most of what it asserts is wrong. It files the company under establishments in 2000, disestablishments in 2003, companies founded in 1996 and companies based in Mountain View. The filings say February 1992, Santa Clara, dead in January 2000. The revenue figure in its infobox is not company revenue at all, it is the nine-month sales of one product family, lifted out of a press release where it was being used to make a growth argument.

I never touched this software. It was sold to the people who administer mail for several thousand employees at once, and in 1998 my own mail was one account at one Turkish ISP, arriving in one program, over a line too slow to carry an attachment worth filtering. The industry Worldtalk lived in existed to hide a mess that home users were never shown, and you only find out it was there by reading the receipts of the companies that got paid to clean it up.

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