Fandom.com In Talks For Possible TakeoverBy Christian
March 31, 2001 - 1:34 AM
The dotcom-crisis stood to bring down the first science fiction company Friday, as sources suggest Fandom.com has gone in emergency talks to find a partner to take over the company, or else be forced to close down.
Fandom.com's financial problems first came to light in early January, when the company announced it would be cutting 20% of its staff (story). Since then, the company has reportedly cut even more staff and almost completely stopped accepting submissions from freelance writers, but apparently these steps were not enough to guarantee a viable future for the company.
According to sources, an important investor pulled out of the company today, causing Fandom.com to go on an emergency search for a new partner. One company rumoured to be interested in acquiring Fandom.com is online entertainment network UGO.com, which focuses on the same young male demographic that Fandom.com targets.
(TrekToday is an affiliate of UGO.com.)
[Update, 12:34 CET:] The talks indeed seem to have led to a higher chance of survival for Fandom.com, though in a diminished form, sources suggest. All staff members have reportedly been laid off, with the exception of six employees who will work on the company's transition and who will be meeting with UGO.com to talk about the future of all the Fandomains. As for the company's other assets, Fandom.com is apparently selling back convention organiser Creation Entertainment to the former owners, while Cinescape Magazine will also be going up for sale immediately. [End update]
Rumours posted on Fandom.com's message boards offer more background to the situation, though we have not been able to confirm their validity one way or the other. According to one poster, investment company Libra Group pulled out the $7 million it had injected into the company, and Fandom.com was considering filing for bankruptcy protection today if takeover talks would fail.
For Star Trek fandom, the difficulties Fandom.com is facing could have immediate consequences. Fandom.com also owns Creation Entertainment, which today opened the 9th Annual Star Trek & Sci-Fi Grand Slam Convention in Pasadena, California. The three-day convention itself will undoubtedly continue as usual over the weekend, as the event already started this morning. However, even the Grand Slam was apparently not immune to Fandom.com's financial troubles, as TrekWeb reported today the limousines for the convention guests were cancelled last week.
Fandom.com started in September 1999 as a bright young company, intended to be 'by the fans, for the fans'. The company bought up a set of independent fan sites to provide contents for its set of FanDomains, including the popular Star Trek Central. In the next year, Fandom.com quickly made a name for itself through an impressive series of acquisitions, buying online retailer AnotherUniverse, science-fiction magazine Cinescape and convention organiser Creation.
After the company's rapid expansion, things began going downhill when the internet crash hit. The first casualty was AnotherUniverse, originally re-branded FandomShop by the site. Most of AnotherUniverse's original staff was let go, eventually leading to Fandom.com's retail sales being outsourced and AnotherUniverse's popular Mania Magazine being shut down. Fandom.com's main site has also been hit, with most of the original content being replaced with content taken from the separate FanDomains.
Exactly what will happen to the company in a possible takeover is unknown. Cinescape Magazine and Creation Entertainment were both profitable when they were acquired by the company, and so should be a valuable asset for any buyer. On the other hand, they also still form relatively separate business units within the company, and it would be conceivable for them to be sold back to their original owners to improve Fandom.com's cash position.
Whatever happens, it will be interesting to see whether Fandom.com will be able to maintain its present position in the online SF world. TrekToday will keep you informed as more news comes out on this.