With IPO on Hold, Idealab Talks About New Ventures

When Idealab registered for an initial public offering in April, the Internet business incubator was primarily associated with e-tailing companies. After all, hatchlings from Idealab’s Pasadena operation sell cars, toys, cosmetics, cookware, jewelry and pet food.

In the six months that followed, Wall Street’s love affair with such e-tailers came to a bloody end.

So last week, Idealab Chairman Bill Gross had to pull the plug on Idealab’s IPO.

In recent months, Idealab had created a crop of new companies focused on e-tailing, wireless technology and software. But because of the quiet period imposed by its impending IPO, Gross was unable to talk publicly about his incubator’s new ventures.

About an hour after breaking the news to Idealab’s 230 employees that their dreams of IPO riches would have to be put on hold until at least next year, he talked a bit about the changes in the company’s portfolio.

Of the 50 companies Idealab has in various stages of incubation, fewer than 10 are based on e-commerce, Gross said. One of the others he’s most excited about is a Silicon Valley start-up called Airwave Wireless, which seeks to exploit a high-speed wireless communication standard known as 802.11. Airwave Wireless would let individuals earn money by setting up small wireless network nodes for the unregulated frequencies used by 802.11, then collecting payments as people use them for short-range data transmissions on their laptops and other devices.

“It’s like owning your own cell tower,” Gross said. “We think we can build out a network bigger than the cell-phone network on other people’s capital.”

Another Gross favorite is Compete.com. This Boston-area firm is commercializing software developed by Idealab so its incubatees can track traffic on their own Web sites and on sites operated by their competitors, Gross said. For instance, the software makes it possible to see where a Web site’s traffic is coming from and exactly where visitors are clicking.

“We decided these tools were so valuable that we would spin them off into a company,” Gross said.

As soon as Idealab’s IPO was withdrawn, its Web site was updated to include some of these new companies. Among them are: Scout Electromedia, which makes wireless devices; EVoice, which provides telephone voicemail services over the Internet; MakeAnOffer.com, which promises to help small businesses and online auctioneers boost sales and profits; and ELease, which facilitates leases on the Internet.