Just three years after Gatineau-based Sitebrand Inc. made its first foray into the public markets, the former e-commerce marketing player finds itself needing to start anew. Topics : Sitebrand , Cactus Commerce , Roots Canada , Montreal
The company is bereft of assets after selling its bankrupt subsidiary to Cactus Commerce in February 2011, and has no publicly announced plans for its future beyond an ongoing $1-million private placement and a proposed name change to Marchwell Ventures Ltd.
On Sept. 6, Cactus wasacquired by U.S.-based Ascentiumand will retain Sitebrand's assets.
Industry players say Sitebrand's experience in marketing to customers ranging from Roots Canada and BMO Financial provides an opportunity to branch out in related markets.
"If they fine-tune and give the same kind of offering without using the same (intellectual property) that they sold to Cactus, they'd be in a better position," says vdoLife CEO Arash Mahin. OBJ interviewed him, and other sources in this story, prior to Cactus and Ascentium announcing the sale.
vdoLife teamed up with Sitebrand in 2009 to provide an interactive virtual spokesperson in ads Sitebrand placed on websites.
"A good play for them, as a shell company, is to branch out into the mobile space doing behavioural targeting and (Internet protocol) profiling. It's what they used to do, and there's not a lot of competition in the mobile space for them."
The competition that does exist in mobile personalization is pretty hefty, he acknowledges. Omniture Inc., bought by Adobe in 2009 for US$1.8 billion, includes mobile analytics among its web personalization platforms. Google has been offering analytics in mobile since 2009.
Sitebrand will also need to be careful not to tread on the toes of Cactus, particularly in the fields of web personalization and e-mail marketing, says Shopify's Harley Finkelstein.
"I can't imagine Cactus is going to let them operate in those particular categories if they bought all the assets," says Mr. Finkelstein, chief platform officer for Shopify, which offers online storefronts for entrepreneurs.
But there are two peripheral directions Sitebrand could take that still use its experience, he said.
One is landing pages - providing targeted advertising for different audiences on different entry pages to a website. An example would be a homepage devoted to musicians, Mr. Finkelstein says.
The other is tapping into social media for peer-to-peer advertising.
While attending sessions recently for incubator FounderFuel in Montreal, Mr. Finkelstein says, the buzz was around how much more likely it is for somebody to purchase a product once a friend buys it and announces it on Facebook or Twitter - anywhere from four to 10 times.
"So a lot of what we're seeing now, more so than ever, is referral-type programs building loyalty. Rather than customers, we see product evangelists."
In any case, the situation is a far cry from what then-CEO Justin Shimoon predicted just before Sitebrand.com hit the public markets in 2008. He said the company was in a "sweet spot" in the event of a recession.
"Most multi-channel retailers with ‘bricks-and-clicks' storefronts - online and offline - are not looking to reduce online because there are better margins since there is no need for a sales representative," he said at the time.
Sitebrand board chair John Eckert could not be reached for comment.
April 11, 2010: Sitebrand.com's fiscal 2009 revenues edge down to $2.1 million from $2.16 million as the company grapples with consumer spending falloff and the stronger Canadian dollar. A restructuring, officials say, allowed the company to narrow its net loss to $754,208 from $2.32 million a year earlier.
June 30: In Sitebrand.com's last publicly disclosed financing, the company raises $320,000 in two rounds of private financing, falling short of its $400,000 goal.
July 29: Second-quarter sales of Sitebrand.com increase seven per cent to $482,576. It narrows its net loss to $29,161 compared with $102,032 the year before.
Dec. 2: Shares of Sitebrand Inc. fall 80 per cent as its subsidiary, Sitebrand.com, enters creditor protection. Doyle Salewski serves as the trustee. CEO Chris Corman announces he will be leaving Sitebrand.com.
Feb. 7, 2011: Sitebrand.com officially goes bankrupt with about $2.5 million in unsecured debt, including amounts owed to its parent, Sitebrand Inc. The firm also owes secured debt of around $510,000 to the Business Development Bank of Canada and Caisse Desjardins de Hull.
Feb. 16: The remaining shell company, Sitebrand Inc., announces a private placement of up to $1 million to pursue "strategic opportunities." It elicits help from Quest Capital Management Corp. The process is ongoing.
Feb. 17: Gatineau e-commerce firm Cactus Commerce buys all assets of Sitebrand.com for an undisclosed price.
April 1: Sitebrand Inc. announces it will delay its required year-end fillings due to the bankruptcy, "related constraints on resources" and "uncertainty surrounding the company's strategic alternatives." A cease-trade order is subsequently issued on its shares.
Aug. 10: Sitebrand Inc. announces the cease-trade order has been lifted, and that it plans to change its name to Marchwell Ventures Ltd. It releases second-quarter results showing no revenues and a loss of $73,473, compared with with revenues of $483,576 and a loss of $29,161 the year before. Shares are also consolidated on a five-to-one basis.
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