AdBrite has shut down its exchange, and says it is close to selling off its other assets: namely, its B2B Marketplace directory and the intellectual property and engineering operations that power the core exchange product. In essence, this means that adBrite as it has been known — since evolving from an ad network — will soon be no more. But, for the time being at least, adBrite CEO Hardeep Bindra tells AdExchanger that the company is still operating with a skeletal staff, though the brand remains alive nevertheless.
“The sale could happen in a matter of days, with the worst case scenario being three- to four weeks,” Bindra said, after AdExchanger contacted him in response to a report that the company was shutting down after sales talks fell through by AllThingsD’s Peter Kafka.
Although in a letter to clients (the full document is at the bottom of this post), Bindra says that bankers pulled the plug on adBrite after failing to sell the company as a whole, it is in talks with “several” private equity firms and “established” ad tech firms about purchasing the technology and related assets piecemeal. If a PE firm takes over, Bindra said that the adBrite name could well survive. But if an ad tech firm makes the purchase and folds the exchange technology into an existing system, the adBrite logo will probably be retired.
AdBrite is vague about why it had to shutter now. It may have suffered from a drought of quality inventory on its platform, as more mature exchange offerings hoovered up ad space. Or it may have been hurt by its past association with adult content, though Bindra noted that the Spanish adult ad network Exoclick was always independent and has no connection to adBrite these days.
For adBrite, this move comes after several months of significant upheaval between its board and the senior management.
Though it had shifted gears from its ad network beginnings, the company was never recognized for making the full leap. So, last May, adBrite’s board decided it was time for a change and brought in Bindra, a former Yahoo/Right Media executive, to complete the evolution.
He was joined by former Yahoo colleague and Oracle technologist Joaquin Delgado. Over the summer, the company added John Underwood to run business development. (We spoke with the team last month about its mobile and video expansion plans.)
The decision to put the company up for sale was made a little less than a month ago, Bindra told AdExchanger today.
“We decided, as we went down the path to sell the business as a whole, that it made the most sense to sell the IP and the core engineering technology,” Bindra said. “Following an evaluation of the business with our lenders and investors, we all agreed that this space is crowded enough that we can find a strategic buyer for the IP business. It didn’t make sense to operate a marketplace on our own. We agreed to put it in the hands of a network or entity that can take advantage of the scale we’ve been able to achieve, particularly our ability to handle over 1 billion impressions a day across PC and mobile. We fully expect to see that business that would be thriving in a different setup, whether it’s under the umbrella of a PE firm or an ad tech company.”
Of the 26 total adBrite staffers who were there before the sale period, Bindra said that there are about 11 employees under the IP and engineering departments. “Most of those people will be transitioning elsewhere,” he said. “Apart from that, it’s more uncertain.”
AdExchanger obtained a letter that Bindra confirmed he sent to some clients:
ADBRITE CONFIDENTIAL INFORMATION]
I wish I was writing to share better news. Our M&A effort fell through week before last and AdBrite’s secured lenders [banks] have made the decision to cease operations effective Feb 1, 2013. Between now and then, we are in the process of selling AdBrite’s core assets – its marketplace and Intellectual Property to interested parties. While we are not broadcasting the details, given that we have maintained an open and collaborative partnership, I wanted to reach out directly to you with the news.
Needless to say this is an unexpected and abrupt outcome impacting us all adversely. While this is a very trying time for my team and I, I did want to express my thanks for being invaluable clients and above all a good sounding board for us when we’ve come with ideas or sought direction.
There is a transition team that has been put in place that will help with the wind down effort and the asset sale – and John Underwood [copied above] and I can be reached throughout this process. If you would like to have a quick call on this topic, we will work with your schedule to set it up.
I have one parting request. Over the course of the last few months, we’ve built a team I am personally very proud of. All of us have been affected by the Bank’s decisions here and I would request that if there are open positions within your organization where some of them could find a new home in – I would much appreciate that insight.
I am available to vouch for any one of our employees and so please feel free to reach out to me for thoughts if you see one of their resume’s come across your desk. It has been a pleasure working with you all over the last few months and I hope our paths cross again in the near future. Will look forward to hearing from you on setting up time to chat.
Solemnly, HB
