uBid
 | |
| Private | |
| Industry | Online auction and fixed-price merchandise |
| Founded | Chicago, Illinois, USA (1997) |
| Headquarters | Itasca, Illinois, USA |
Key people |
Bob Geras, Chairman Ketan Thakker, CEO/CFO Michael Schmahl, EVP, GC Michael Moss, Director |
| Products | Consumer merchandise including electronics, computers, jewelry, fine art, housewares, computer accessories, and computers |
| Website |
www |
uBid.com manages an online auction style and fixed-price shopping website that offers both goods sold directly by the company and items sold by pre-approved third party uBid-certified merchants.
Overview
uBid Holdings Inc. offers both products sold through and by uBid.com and products offered by other established businesses through the uBid Certified Merchant Program. The site specializes in excess new, refurbished and overstock consumer electronics such as computers, electronics, home goods, jewelry, watches and cellular phones. uBid.com's sister website RedTag.com offers a Deal of the Day, and Flash Sales of specific fixed-price merchandise. uBid.com is not a penny auction site where it sells bids, nor does it open its platform compared to eBay to any third-party sellers without being approved. Sellers must be approved with the idea that the platform should avoid counterfeit, infringing, stolen or other questionable products on its platform. uBid once had the closest market share in the on-line auction style space, approximately 15% market share compared to eBay and once had a stock market valuation that peaked at close to $2 billion.
History
uBid.com was formed and launched in 1997. Originally the platform was a subsidiary of PC MALL (MALL). The co-founding management team took the company public in 1998 and achieved a market capitalization value of over 1.8 billion dollars at one point. The company officially spun off from PC Mall with its co-founding management team in 1999. Ownership has changed multiple times over the years, including one involuntary bankruptcy petition with one of the previous owners. As of October 8, 2010, the uBid.com and Redtag.com platforms are owned and operated by uBid Holdings, Inc., and the company is headquartered in Itasca, Illinois.
CMGI acquired the company from its founders and shareholders in early 2000 for a reported $407 million.[1] The company is still memorialized at the home of the New England Patriots, formerly CMGI Field, now Gillette Stadium, with the "uBid.com Entrance".[2] CMGi was an internet conglomerate with ownership stakes in over 90 companies, including AltaVista, Navisite, Lycos, Talon, Sales Link, Yes Mail, Geocities-purchased by Yahoo, and Exchange Path to name a few. According to SEC filings CMGi once had a market capitalization of about 60 billion dollars.
In early 2003, CMGi sold uBid to Takumi Interactive, a holding company formed to manage its purchase by Thomas Petters and the Petters Group of Minnetonka, Minnesota.[3] Two uBid executives, Robert H. Tomlinson Jr. and Timothy E. Takesue, assumed executive leadership roles within Takumi Interactive. Tomlinson, previously uBid's Chief Financial Officer under CMGi ownership, had been named President of Takumi Interactive. Takesue, an original member of uBid's Founding Management team and the most recent Senior Vice President of merchandising under CMGi ownership, assumed the role of Executive Vice President, Merchandising. Mr. Takesue in January 2008 at the Consumer Electronics Show (CES) accepted the Consumer Electronics Daily News Direct Seller of the year award. The award was co-sponsored by consumer electronics manufacturers and distributors. In Petters' 2009 criminal trial on numerous Federal charges, Petters testified that uBid was profitable,[4] which was untrue. According to SEC filings, uBid had never claimed to be a profitable corporate entity since inception. The new company to date retains none of the original founders of the uBid platform as a senior executive. Petters, in prison since October 2008, is currently serving the remainder of a 50-year prison term in Leavenworth, Kansas, for multiple crimes associated with operating a multibillion-dollar Ponzi scheme possibly going as far back as the late 1980s according to some press reports and trial transcripts. According to SEC filings and public press releases, The Petters Group divested their majority holdings status in uBid in 2005. The Petters Group once held positions in over a hundred companies, employing upwards of 3,000 people at one point, and partnered at various times, according to press releases, with companies including Bain Capital/Fingerhut, Polaroid/Chase Bank, and Sun Country Airlines/Whitebox Advisors,and Boeing/Petters Aviation, where they once owned minority, majority, or full ownership interests. An Ohio business school dean has agreed to return stock and $1.25 million in cash he says he earned as a consultant to Tom Petters before the Wayzata businessman was caught running Minnesota's biggest business scam. The settlement with Roger Jenkins, dean of the Richard T. Farmer School of Business at Miami University in Oxford, Ohio, was disclosed in October 2012 in a court filing by the receiver sorting through the Petters mess for funds to compensate fraud victims.
Under the settlement, Jenkins will return the cash and 22,200 shares in Internet retailer Enable Holdings Inc., a former operator-owner of websites uBid and RedTag. The over-the-counter stock traded for less than 1 cent on average in 2012.Dr. Jenkins work has been published in the Harvard Business Review. He is the recipient of the Harold Maynord award. Dr. Jenkins earned his undergraduate degree from Berea College, his MBA at East TN State and his PHD from Ohio State University. According to SEC filings, The Petters Group was listed as the company's largest single minority shareholder, until late 2008.
In September 2007, Jeff Hoffman, a founder of the Priceline family of companies and Walker Digital, joined the company as its CEO. Hoffman restructured the company into several units, and focused it on the liquidation of excess inventory. Hoffman immediately hired Lee Olsen as his COO to oversee the company; Olsen was previously, an executive with IBM. Hoffman obtained only the URL or domain name Redtag.com from Petters, and created a fixed-price liquidation site by that name. He also instituted liquidation sales at specific temporary sites - spearheaded by EVP Tim Takesue in early 2008 - bulk excess inventory liquidations via Dibu Trading Corporation, and "Commerce Innovations", a company that was being developed to sell auctioning technology software, while Executive Vice President and General Counsel Glenn Weisberger; Vice Presidents; Theo Brasch and Kirk Maier took over the merchandising roles that oversaw the uBid web site procurement process, procurement for Dibu Trading and Procurement for the Live events, and oversaw the management of the personnel that handled the listings of its third party sellers from early 2008 until their resignations. The new business model was well received in the financial community and the Board of Directors, which at the time included Mary Jeffries, CEO of Petters Group Worldwide and CEO of Polaroid and Director of various other public Companies including Dave's Barbeque, Petters Group Worldwide Chief Legal Counsel: David Baer named Minnesota 's Lawyer of the Year of 2006, Steve Sjoblad, former founder of FICO, Ken Roehring, Professor of Marketing at The University of Minnesota, and Casey Gunnell directed Hoffman to spend a large amount of capital the company held in reserve on these efforts, while scaling back its marketing and advertising efforts.
After Mr. Petters' arrest in the fall of 2008, uBid laid off a large portion of its workforce in an effort to contain costs. Management announced 12 initial layoffs, but ultimately about 31% of its workforce, or between 22–28 employees, were laid off.[5] In the fall of 2008, the company also immediately accepted the resignations of Mary Jeffries and David Baer from its Board of Directors.
Subsequently, On December 2, 2008, the company received financing from Robert T. Geras and Theodore Deikel, on terms that essentially gave Mr. Geras, his wife and Mr. Deikel warrants for a majority controlling interest of the company, in exchange for a loan of approximately $1.5 million.[6] In 2009, Mr. Geras resigned his position on the company's board of directors. Additional investor funds were also raised through a senior convertible debenture.
On December 22, 2009, Mr. Hoffman resigned from the company. uBid co-Founder Timothy E. Takesue was named interim CEO.[7]
On March 1, 2010, Patrick L. Neville, a corporate turnaround specialist, became the company's official CEO, essentially following Mr. Hoffman's vision for uBid.com and RedTag.com. Neville filled two more Board of Director seats in 2010. Neville initially, started his role as day to day CEO early, on February 1, 2010, for no compensation, to try to immediately help the company. Neville officially resigned his position of CEO of Enable Holdings on October 15, 2010.
2010 bankruptcy and acquisition
In September 2010, a group of unsecured creditors forced Enable Holdings, uBid's former holding company, into bankruptcy.[8] On October 8, 2010, Sunrise Bidders (now uBid Holdings, Inc) purchased uBid and other assets at a court-authorized auction, and appointed Scott Koerner as the company's President. Koerner was previously Senior Vice President of Merchandising for all of North America for Office Depot (ODP); he originally joined Enable Holdings as a paid consultant for then CEO Pat Neville from approximately June 2010 until October 8, 2010. Mr. Koerner led the article 9 sale out of the assets of Enable Holdings Inc. Mr.Koerner departed the Company as President, CTO and Director in January 2013. According to SEC filings Sairam Rangachari, CTO of uBid Holdings successfully filed for a $4,600,000 capital infusion where more than half of that amount was already raised by June 25, 2013. Mr. Rangachari, a former founder and Senior Executive with Options Express which was eventually sold to Charles Schwab for over $1 billion, took over as President, after Mr. Koerner's departure in January 2013 as CEO. Mr. Rangachari became President and CTO, Mr. Ketan Thakker as CFO, Mr. Michael Schmahl as EVP and General Counsel and Mr. Michael Moss as Director of eCommerce with full responsibility and authority over uBid and RedTag's Certified Merchant Program. According to the uBid website the company's headquarters were moved to a facility in downtown Chicago. In September 2014, it was announced that Rangachari departed uBid Holdings, with Ketan Thakker now as acting CEO.
uBid v. GoDaddy
In 2009, uBid commenced a lawsuit against GoDaddy, in Federal Court in Chicago, accusing the company of profiting off of domain names that were similar to its trademarked names. uBid accuses Godaddy of unlawfully profiting by placing paid advertisements into parking pages, and splitting revenues with its customers, who uBid alleges to be cybersquatters. The lawsuit was originally dismissed for a lack of jurisdiction, but that decision was reversed by the Seventh Circuit. The case was pending before U.S. District Judge Charles Kocoras, but was dismissed by agreement on October 17, 2011.
Certified Merchant Program
In order to maintain a trusted trading environment, uBid only allows established businesses who have been pre-approved to sell products on its site. Merchants wishing to be approved must provide tax and credit information as well as trade and bank references to prove their credibility. Once approved, Certified Merchants are allowed to sell their products on the site, however all payments and customer service inquiries are made directly through uBid in order to maintain consumer trust and provide the best possible post-sale service. Due to this system, Certified Merchants do not have any direct interaction with customers except for questions asked about products through the uBid site, nor do they see customers' credit card information.
However, it should be noted that uBid currently has no existing method for seller feedback or ratings. This has led to some disreputable vendors being allowed to use uBid to sell counterfeit products with impunity.
Other
uBid Holdings announced in February 2011 the formation of uBid.com Business, which is the company's B-to-B arm, providing revenue from SMB, government, education and other business customers.
Notes
- ↑ "CMGI To Acquire uBid.com". Retrieved 2009-12-01.
- ↑ "Gillette Stadium". Retrieved 2009-12-01.
- ↑ "Takumi Interactive, Inc. Purchases uBid Business". Retrieved 2009-12-01.
- ↑ "Petters blames top associates for alleged fraud". Retrieved 2009-12-01.
- ↑ "Pink-Slip Monday for Ecommerce with uBid, eBay Layoffs". Retrieved 2009-12-30.
- ↑ "Enable Holdings, Form 3, 12-2-2008.". Retrieved 2009-12-01.
- ↑ "Enable Holdings 8-K, dated December 30, 2009". Retrieved 2009-12-30.
- ↑ "uBid Auction Site's Parent Enable Holdings Forced into Bankruptcy". Retrieved 2011-08-03.