Christchurch-based NBCi New Zealand is to close after a potential buyer pulled out of negotiations to acquire the company from its US owner, media giant NBC.
NBC bought the company, formerly known as GlobalBrain, from founder Grant Ryan in 1999 in a multimillion-dollar deal and rolled out its search engine technology across its internet division, NBCi.
In April General Electric-owned NBC announced the demise of NBCi following the dot-com stock crash, resulting in the loss of 300 jobs. However, it was hoped that the local operation would be sold as a going concern.
But NBCi New Zealand founder and company head Grant Ryan says he was told it would close two weeks ago after sales talks with a US CRM (customer relationship management) software company fell through.
“They were a CRM company that was looking to extend their product line to other services and searching was something they were looking at adding to their list. They were very keen but because the market there is so bad, a high-level strategic decision was made not to expand. And basically there wasn’t a plan B. We’re all going to be made redundant.
“The original market for our technology has collapsed. When NBCi, the seventh largest website in the world, starts losing money it’s a pretty tough market.”
The closure affects 25 staff but Ryan says other companies are asking about hiring the people he is forced to let go.
“They all got a pretty good redundancy package,” he says.
Ryan and other shareholders will get a cash payout for the NBC shares they possess. He and co-founders Shaun Ryan and Wayne Munro and three other employees hope to buy back the technology from NBC and start again. The asking price is expected to be drastically lower than what NBC paid for it.
Ryan says that if the buy-back is successful staff numbers will be depleted.
“To go back into start-up mode we’ll need a much leaner team,” he says. Given that the original market has dried up, Ryan says the company will instead look at selling to corporate intranets.
Over all he’s philosophical about the closure. “We’ve all learned a bit and earned a lot of money. We’ve had fun and we’re in the position to have a crack at something else. The fact that the market collapsed wasn’t our problem. The guys here were involved in all sorts of engineering of the NBCi website.”
NBCi had started to license GlobalBrain’s technology to other multinational to use on their sites and General Electric uses it for its portal.