Zango Shuts Down Operations

Apr 21, 2009 3:00 PM PST
SEATTLE — Adware maker Zango has shut down its operations.

XBIZ emails and calls to Zango’s Seattle office went unanswered through late Tuesday after The Register reported that the company was forced to pull the plug on its business after it was left unable to pay off its debts.

The report further said that video search engine firm Blinkx purchased a portion of its assets from the company.

"The bank foreclosed on Zango and Blinkx purchased some technical assets from the bank, including some IP and hardware, which constituted about 10 percent of Zango's total assets," a Blinkx spokeswoman said.

Zango’s closure may mean the end of the adware business model. Claria, formally Gator; WhenU; and DirectRevenue all have closed up shop in recent years.

Zango started off as 180 Solutions in 2004, raising $40 million from Spectrum Equity Investors and growing to employ more than 230 workers at its peak.

The company has faced accusations of deceptive installation practices and problems in removing its software once installed led to a lawsuit by the Federal Trade Commission.

Zango settled the suit in November 2006, agreeing to pay a fine of $3 million without admitting guilt. The firm said that its problems were due to rogue affiliates.

The company currently is embroiled in a $750,000 lawsuit in California, where Epic Cash has asked a court to rule against the adware maker and AdultFriendFinder.

Zango and AdultFriendFinder are accused of "diverting traffic away from Epic Cash sites and converted Epic Cash’s business to their benefit,” by taking advantage of plaintiff’s marketing efforts, presumably when potential consumers are inputting certain keywords or searching for specific sites, which subsequently leads to Zango pop-up ads.

Ken Smith, Zango’s co-founder and former chief technology officer, said that Zango finished its life with a “fire sale” on his blog.

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