The site that put the concept of pay-per-bid auctions on the map is now apparently in financial trouble, Technologizer has learned. Although the company’s front page claims “technical issues,” documents from a Munich, Germany bankruptcy court indicate its parent company — Shopping Entertainment AG — filed for bankruptcy protection on Wednesday.
The company is asking for protections from its debtors, and it has named a liquidator to start divesting its assets.
I’ve done a little bit of research across the Web and it seems as if some Swoopo users have been waiting for their items for quite a while, and the site has been down for about a week now. But at least we’re finding out why: Swoopo’s run out of gas — not at all surprising since its business model is built on the willingness of bidders to lose money on lost auctions. If you don’t win, you still paid for every bid you made.
Swoopo caused quite a stir when it first burst onto the scene in 2008 with its promise of being able to get items on the cheap through its penny auction format. I first took a look at the company back in September of that year, asking whether the auction site was nothing more than a well-designed gimmick.
Although I just saw it your average story, that blog post has now become one of Technologizer’s most highly trafficked and commented posts ever. They would later return in October to attempt to explain their side of things. The European Commission said that the company’s business plan was following laws governing online auctions.
I guess it may be time for us to add Swoopo to the deadpool of failed technology companies. I do have to say though, I’m really not all that sad to see this one go.