It seems Cuil.com is dead.
Michael Arrington’s sources suggest this is permanent.
That is $33 Million down the drain in research, development, infrastructure for the search engine crawlers etc.
But that is a fair investment… the investors new there was a significant risk, and based on the Crunchbase profile there were a whole load of smart people involved.
To misquote Alfred Lord Tennyson’s poem In Memoriam:27, 1850:-
It is better to have tried and failed than to never have tried at all.
But Leapfish… it is not just investors who will end up losing their money… if they haven’t already pulled their investment out.
Traffic numbers between Cuil & Leapfish are very similar i.e. Leapfish hasn’t gained any traction.
No amount of paid reviews is going to revive a flagging product – Google instant just blows any unique qualities away – before anyone suggests that somehow Google are copying Leapfish, there have been various “instant” type search implementations for the last 5 years and meta search engines are a dime a dozen.
“Boiler room” sales practices – an interesting way for a startup to get “funding” from people who in some cases were borrowing money of family member’s credit cards so they didn’t miss the great opportunity to “invest” in a guaranteed listing at the top of a search engine noone is using.
Up until fairly recently you might have thought their traffic was growing… and that that was search based.
However under the surface you have the Leapfish directory http://directory.leapfish.com/
That looks like the search engine traffic (from other search engines) has taken a hammering, and all that is left of their traffic only compares to a mildly popular, though niche blog such as my own.
Mark Kithcart, Director of Marketing whenever Leapfish are criticized comes up with amazing quotes such as:-
Also I think a few clarifications around our advertising model may help. We are not the traditional PPC modeled platform where you rent space and pay per click. We offer advertisers an opportunity to actually register Keyword Positions outright. We do charge a yearly renewal fee, but advertisers are able to benefit from both the traffic and equity side of the Keyword Position as the engine continues to grow over the next several years.
Equity equity equity…
But Leapfish doesn’t grow… maybe the only way it grows is by buying traffic in the hopes of luring in more people to buy keywords that are guaranteed to rank on a search engine no one is going to use… well other than the people who have purchased keywords.
I would have thought there were government departments in the US who were meant to investigate things like this – SEC, FTC etc – maybe the total investment isn’t as large as the Madoff scenario, but people are being hurt in a similar way.
I can’t understand why there would need to be a class action lawsuit against Leapfish.
Matt’s analysis is actually important to add balance to this blog post because at one time he equated Leapfish traffic number to the amount of people the Leapfish boiler room sales people could call in a day to sell keywords to, many of who would check out the site before hopefully saying no.
It is quite possible the massive drop in traffic displayed in the Alexa graphs is due to a reduction in phone calls.
This blog post is all personal opinion, based upon the limited information I have available and public statements by official Leapfish representitives. I have never been cold called by Leapfish, but then I am a crazy guy living in the middle of the Polish countryside.
I have previously covered another startup by the same founder, Ben Behrouzi called ePerks.com – that website ripped off lots of Real Estate people and no longer exists.
My prediction is that Leapfish is heading in the same direction… the deadpool and I am sorry that so many people may have lost their “equity” investment without the typical safeguards you would expect for such a high risk undertaking.
I knew I should have checked one more resource as for a long time Vlad was monitoring Leapfish though mostly on Twitter where I haven’t been very often in the last 6 months.
He had posted last year on one blog that he was no longer interesting in covering Leapfish.
UPDATE May13, 2010: Things pertaining to LeapFish.com, their founders and management, along with related startups are no longer of interest to me, therefore no further comments are allowed on this post. There are also more reliable sources out there (such as Better Business Bureau) to help you make an informed decision about LeapFish.
Staff laid off at parent company
Class action from employees that hadn’t been paid… won by employees, and then DotNext, the parent company failed to pay the award.
My Personal opinion – Leapfish is now a Zombie – the living dead – the search box on the site is about all that is left, a meta search engine that no one uses.
A note for any Leapfish affiliates – if the can’t pay their employees, the chance that affiliates will be paid I would class as slender.
If you are interested in buying lots of keywords, there is this staute on Staten Island you might also be interested in. ;)