« Previous entry | Home | Next entry »

The curse at Wine.com, and clarification

Updated

wine.jpgChris Kitze, the white knight investor who rescued San Francisco online retailer Wine.com a few years ago, may need something stronger than wine to get over his company's latest saga.

Here's the story that ran in the Mercury News today, and an important clarification. As usual, we were limited in what we could say in the paper version, and were forced to skip over many excruciating details for sake of brevity. Basically, though, Kitze is about to lose most of his money in Wine.com after a group of tough-nosed investors snatched the company away. Kitze isn't talking, but other players confirmed the outcome of the valley's latest blood battle.

Here, though, is the important clarification. It is on a point made by George Garrick, the company's CEO -- who has just left the company under protest, even though his name is still up on the Web site. Unfortunately, we cut a crucial part of his quote. The part in bold is what we didn't carry in the paper:

``My job is to be the CEO,'' Garrick told us. ``I can't do that job if a single controlling shareholder is going to use their voting rights to further their own interests at the expense of other shareholders by unilaterally overruling decisions that the Board and the Management Team have made."

This is important because the board itself had made a decision to support management's plans, he and others told us. Garrick even signed off on the deal to be acquired. Valuable time was spent, in getting this done. The company ran out of options. But then Baker unilaterally changed its mind, and pulls the plug. Garrick additionally told us: "With this latest financing, Wine.com is essentially a subsidiary of Baker Capital."

We will likely file a correction in the paper. Apologies to Garrick.

We are still trying to reach the Baker folks for their side of the story. We put in more calls this morning.

Anyway, below are links to our earlier chapters of this never-ending Wine.com opus.

The more recent stuff comes first. We've highlighted the main stories in bold. We also note that several players in this story have taken exception to the way we've characterized the causes of Wine.com's continuous failings. Various players, founders, CEOs clearly held different visions, or had different understandings of the online wine market. We agree, it is not fair to lump them all into a single basket and say they all misunderstood the complexities of America's regulated wine market. It is just that no one was able to get it all focused properly. It is the sad story of Wine.com.

--2005: Peter Sisson, former CEO of Wine.com, came back with Teleo, though apparently he left before this happened yesterday.

--2004: Kitze and team raises more money, with new investor Baker leading the round. This, we surmise, is where Kitze probably should have instead sold the company and gotten out. But that would be armchair quarterbacking on Monday.

--2004: Kitze recruits A-Team.

--2003: Kitze raises some more money, begins to steady the ship.

--2003: Under Kitze, new CEO Ekman strikes some initial deals and rejigs focus.

--2002: Kitze arrives (free registration), total restart.

--2001: Some ex-Wine.com folks form a different venture, New Vine Logistics.

--2001: Creditor Sand Hill Capital transfers Wine.com's assets, such as customer lists, etc, to eVineyard, and oversees auction of much of Wine.com's stock (scroll down).

--2001: First full story of Wine.com's implosion.

--2000: Rivals Wine.com and Wineshopper.com merge.

--1999: Initial story
about how wine retailers Wine.com and Winesopper.com face off against each other.


Trackbacks
TrackBack URL for this entry:
http://www.siliconbeat.com/cgi-bin/mt331/mt-tb.cgi/658

Links to blogs that reference this entry:

From: Venture Chronicles by Jeff Nolan
The curse at Wine.com, and clarification
Excerpt: the dirty underbelly of the private equity business. I think it's fair to say that every venture investor has been in a situation where a single investor is using their cap table power to push forward their own agenda even
Tracked: August 31, 2005 12:24 PM
From: SiliconBeat
San Francisco's Wine.com has long legs
Excerpt: Here is our exclusive (free registration) on the latest twist in the saga at San Francisco's Wine.com. Former Chairman Chris Kitze and twelve others have sued East Coast venture capital firm, Baker Capital. Baker did not respond to our request for com...
Tracked: February 13, 2006 7:33 AM
From: TJ's Weblog
the story behind wine.com
Excerpt: Matt Marshall at Siliconbeat covers the most recent news about ownership changes at troubled wine.com: "My job is to be the CEO,'' Garrick told us.' I can't do that job if a single controlling shareholder is going to use...
Tracked: June 10, 2006 5:49 AM
From: Wine
Wine
Excerpt: Columns, wine reviews and bulletin boards. Message boards and recommendations, lots of links.Features review...
Tracked: July 28, 2006 12:24 AM

Comments

If you look at the bottom of the article it says "winesopper.com" Typo, but funny.

devboy00 on August 31, 2005 8:49 PM
Comment link

There has been a lot of talk lately about Google‚s intentions. I thank GOOGLE is tipping its hand.
What does GOOGLE intend to do with $6.1 billion in cash.
Why is there speculation about GOOGLE‚s interest in the Yellow Book and its Parent company YELL.LN. of England.
Why is „Ads By GOOGLEš a common site on popular Web Pages?
Why is Google buying print advertising.
What does GOOGLE intend to do with all of the dark fiber that it is has been purchasing and the speculation of them developing their own GOOGLE Net.
Why does GOOGLE send you a text message on your cell phone to give you an authorization code for its G. mail and GOOGLE TALK.

My speculation:
Google intends to buy the yellow book company. The goal will then own the entire businesses listing directory in America and Europe. What would they do owning this listing. They would index it on the Internet.
They would have the ability to be in contact with millions of businesses. They could offer priority advertising position in not only the Yellow Book but also on key word local and international searches. All of this for a price; collected by a GOOGLE payment system. What price would your business pay to be the first listing in a local or international search for your product or service.

What if U.S. and international business‚s we‚re all linked by G mail and GOOGLE TALK on GOOGLENET. What if, on GPS enabled cell phones a text message was transmitted to your cell phone telling you your proximity to a business listed on the GOOGLENET. What if using your cell phone it would be possible to text message any business listed on the GOOGLENET. What if, from your home computer you could talk to any company or business listed in the GOOLENET for free. What if, using GOOGLE Wi-Fi supported by GOOGLENET you could do the same things.

GOOGLE does not want to be Microsoft. They want to be bigger than Microsoft.

Tim Bowen on September 1, 2005 9:24 AM
Comment link
Post a comment












Remember personal info?