By: Karl Greenberg Scout Electromedia's Modo Device Offered Arts, Entertainment
(Adweek IQ) The latest in a string of dot-com flame-outs, Scout Electromedia closed up shop this week after a third round of financing failed to materialize.
The San Francisco-based service, which supplies entertainment information on a proprietary wireless device in local markets, shuttered all operations, idling an estimated 80 employees, staffers said.
"The call came yesterday," said one employee. "We had two rounds of venture financing, the third one failed." Continued financing was needed to subsidize losses this year until the company turned a profit, expected in 2001, he said.
Rudy Burger, the CEO who replaced Geoff Pitfield several weeks ago, could not be reached, and William Lynch, a marketing executive, did not respond to a phone message seeking comment. Flatiron Partners, a N.Y.-based venture capital firm and Scout investor, refused to comment.
The closing came only four months after the launch of Scout Electromedia and a month after the launch of its flagship offering, Modo.
Modo, a handheld wireless device somewhere between a pager and a personal digital assistant, sold for about $100, including wireless updates, with no monthly fee. The service featured location-based information on restaurants and entertainment and art venues and "eclectic, provocative and in-the-know" editorials and reviews, the company said.
The company anticipated selling abbreviated banner ads, on the bottom of the screen, allowing clickthrough to full-page ads. Analysts, though, have taken a dim view of ads on wireless devices, since they tend to be text-only, static and non-interactive.
Scout had established editorial offices, driven mainly by free-lance contributors, in New York, San Francisco and Los Angeles and planned next year to expand to Chicago, Atlanta, Boston, Miami, Seattle, Washington and Philadelphia.
The Modo had been designed to offer a low-cost, if limited, alternative to Palm and Handspring and the monthly fees commanded by wireless modems from companies like Omnisky. The goal was to reach millions of people who don't use PDAs, former CEO Geoff Pitfield said in September.
The board ousted him in hopes of finding an executive who could steer a course to earlier profitability, one staffer said.
Copyright 2000, Editor & Publisher.
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