Auctions Bid Goodbye to Failed Dot-Coms

It was another funeral in Silicon Valley. There were no tears, but plenty of burial offerings.

The crowd filed past piles of high-end computer equipment, rows of telephones and office cubicles, and of course, a Foosball machine. The talk was of megahertz and gigabytes.

In the past year, a crisp ritual of death has established itself across high-tech land as the property of failed dot-com companies has gone up for sale. The patter of auctioneers can be heard in every tech corridor in the country, but nowhere more than in Silicon Valley, the center of the boom--and now of the bust.

On a brilliantly sunny day last week, the possessions of Desktop.com and of Pensare, an e-learning company now in Bankruptcy Court, were being peddled in an office park in this Bay Area suburb. Nearby in the same sprawling complex, a preview was underway for an auction involving five other dot-com firms.

Buyers came not to mourn, but to get a good deal. If questioned, they nodded knowingly over the dot-com shakeout. Too many companies spending too much, too quickly.

“They didn’t care what the cost was. They wanted to get up and running right away,” recalled Paul Flood, a Santa Clara County equipment broker who a couple of years ago was busy helping Internet firms set up their facilities.

Now he is part of the dismantling process. He tells gloomy dot-com executives how much they can expect to get for their fancy office gadgets on the secondhand market. And he makes the auction rounds, buying those gadgets for resale.

Along with dealers, the auctions attract people purchasing computer gear for themselves or their businesses. Some are from dot-com companies, either start-ups or survivors of the crash.

“I don’t want to end up like the people I’m buying from,” remarked one man from a small, Web-based firm who would only identify himself as Neal.

His 2 1/2-year-old company now purchases virtually all its equipment secondhand, much of it almost new and at a third of its original cost. “We’d like to believe we’re a little more fiscally conservative” than many of the failed enterprises, he said.

He had just walked through a preview of the next day’s auction in the former headquarters of the search engine Infoseek a short distance away.

It was no longer an office, but a temporary warehouse.

The corporate logo had been stripped from the building. Computer monitors were stacked on the floor five deep and 20 across. There were rows of fax machines and printers, conference call sets and servers labeled with lot numbers.

Everything goes at these sales, from unopened toner cartridges to beanbag chairs and flashy personal computers.

For an industry that prides itself on doing things differently, there is a notable sameness to its possessions.

Kirk Dove, president of auction services for Foster City-based DoveBid Inc., knows exactly what he’s going to find when he arrives for a dot-com sale.

There will be Cisco routers, Sun Microsystems servers, Lucent telephones, Dell laptops, Herman Miller Aeron chairs and, inevitably, a Foosball machine.

In that sense, Dove observed, dot-com workers “almost became a homogeneous group.”

Standing outside the Pensare auction--which also featured a refrigerated beer keg--equipment broker J.R. Rodeffer of Tustin said he has seen so many Foosball machines and pingpong tables at dot-com auctions that he has concluded they’re unlucky.

Maybe, but dot-comers still want them. The Pensare Foosball table was bought by an East Bay software firm.

DoveBid’s business has shot up with the wave of corporate failures in its backyard. The six-decade-old family company recently started a monthly dot-com auction exchange at which items from several companies are sold.

Fittingly, the auction house does a lot of business online. Many of its dot-com auctions are Webcast live, attracting bidders from all over the world. Buyers from Slovenia, Canada, Thailand and Hong Kong were signed on for the Pensare-Desktop sale.

Among the hundreds registered to bid were a Dallas architect, an Arkansas church, an Oregon gourmet food company and a New Jersey software firm.

West Coast-based CowanAlexander Equipment Group, another major player in dot-com liquidations, holds Webcasts as well, but to a lesser extent.

Because so many of the dot-com enterprises were short-lived, co-owner Adam Alexander says the e-world auctions lack the kind of wrenching emotion sometimes evident at the dissolution of a long-standing business.

“The employees and management teams came and went relatively quickly,” he said. “You don’t have a receptionist who’s been sitting in the same chair for 20 years.”

Chris Reno only sat in his chair at Infoseek for three years, but he was hardly dispassionate about its demise.

“It was a good thing,” he said as he stood outside his former offices. “I think Disney [which bought Infoseek] drove it into the ground with ineptitude. It was mismanaged to death.”

A quality manager for search products known in the company as the “spam assassin,” Reno, 37, remains out of a job months after he was laid off.

He had no intentions of bidding for anything but motorcycled over to the auction preview with one of Infoseek’s co-founders, Ed Miller.

“It just makes me remember all the hard work people put in,” said Miller, who left the company two years ago. “It’s kind of sad.”