Ocean Beach Webshots is sold for $82 million

Webshots: A Dot-Com Boom and Bust Case Study

The story of Webshots serves as a fascinating, perhaps even cautionary, tale from the dot-com boom era. Originally a computer screen saver company distributing sports-oriented desktop backgrounds, it evolved into a Webshots photo-sharing website that was somewhat ahead of its time. Its early functionality, displaying user-uploaded photos, bore similarities to the basic concept of Facebook in its initial development stages. Understanding such historical context can inform current online strategy.

The Rise, Fall, and Rebirth Cycle

Before the dot-com bust, co-founders Andrew Laakmann (then 32), Narendra Rocherolle (33), and Nicholas Wilder (29) sold the service for a whopping US$82.5 million in stock to Excite@Home. That’s right, US$82.5 million in October 1999, despite the company having few proven revenue streams at the time – a hallmark of the dot-com bubble valuations.

When Excite@Home was forced into bankruptcy, a judge approved the sale of Webshots as part of Excite@Home’s plans to cease operations in March 2002.

Before selling Webshots back at a staggering 97 percent discount from the price it paid, Excite@Home also sold off Excite.com for US$10 million and online greeting card service Blue Mountain for US$35 million. Excite@Home had paid US$6.7 billion and US$780 million respectively for those two sites back in 1999.

This allowed the original founders to buy Webshots back at an incredible discount for just US$2.5 million cash in 2001.

Webshots Timeline: Key Moments

Here’s a brief history of the company’s journey:

• 1995 – Webshots started as a sports-oriented screen saver for desktop computers. Founders Andrew Laakmann, Danna Laakmann, Nick Wilder, and Narendra Rocherolle adapted the software for the Web, and the photo-sharing website was born.
• 1999 – Founders sold Webshots to Excite@Home for US$82.5 million in stock.
• 2001 – Excite@Home declared bankruptcy. Webshots assets were purchased back by the founders for US$2.5 million cash.
• 2004 – Webshots became the number one photo-sharing site with 200,000 paid subscribers, grossing US$15 million annually. Founders sold Webshots again, this time to CNET Networks for US$71 million.
• 2007 – CNET sold Webshots to American Greetings for US$45 million in cash.
• 2012 – Threefold Photos, whose Board of Directors included original founders Narendra Rocherolle and Nick Wilder, purchased Webshots from American Greetings for an undisclosed sum. The original Webshots service was later replaced entirely by Smile by Webshots (now simply Webshots again), a cloud-based photo management application.