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December 2, 2008

What Happened to Pownce?

Posted by Max Chafkin at 8:21 PM

Yesterday, the blogging company Six Apart announced that it had acquired the micro-blogging site Pownce. Pownce will cease to exist as a standalone website and cofounder Leah Culver, who was one of the entrepreneurs under 30 profiled in our October issue, will be moving to Six Apart and shutting down her own website. No financial terms were disclosed but considering the current economic climate, the dominance of Pownce's main competitor Twitter, and the fact that Six Apart just laid off a bunch of people, it’s unlikely this was a huge exit—if cash changed hands at all.

There’s much hand ringing going on right now on the Web about what this means. Jason Calacanis is perplexed, Allen Stern is outraged, and Owen Thomas is gleeful. Part of the reason for this strong reaction is that Pownce had a lot of promise. It got great buzz and was seen by many to represent a legitimate standalone threat to Twitter. The New York Times called it the “hottest startup in Silicon Valley,” and the early reviews of the service were good. Hell, the service was good. Moreover, Pownce couldn’t have been losing that much money: It had just two fulltime employees, a couple of sublet cubicles, and actual paying customers (not a nontrivial thing at a web startup).

So what happened? Most are reading this as a failure story, but I think it’s more complicated. For one thing, as Om Malik points out, Pownce may actually be more valuable to Six Apart as a technological platform than as a standalone site. In fact, a similar thing happened a year ago when Google bought Twitter’s other main competitor Jaiku and promptly closed the service to new users.

And then there’s the Kevin Rose factor. Rose, who I profiled in our November cover story, was Pownce’s main backer and controlled the company. But he also just raised $29 million to grow Digg, and I wonder if this move wasn’t partly about focusing on his main gig. Stern says that what happened to Pownce was "pretty shocking business strategy.” To me it seems like Rose is just keeping his eye on the ball.