Medio To Sell Assets, Go Out Of Business -- Deal To Sell Multimedia Firm To Connectsoft Fizzles
Medio Multimedia Inc., a Redmond company started by a former Microsoft employee, is selling all of its products, furniture and equipment and will go out of business as soon as creditors are paid, founder Steve Podradchik said today.
A deal to sell the company to ConnectSoft Inc., a Bellevue software company, fell through Friday. Podradchik said ConnectSoft could not raise $2 million in cash for the deal, but ConnectSoft spokeswoman Pam Miller said there were other reasons. She did not elaborate.
Medio made a name for itself with its first CD-ROM software title, "JFK Assassination: A Visual Investigation." The program earned reviewers' praise and led to follow-ups, including "Exploring Ancient Architecture."
Medio also gained attention for merging CD-ROM technology and the Internet by creating an information service on the Net's World Wide Web that supplemented the CD-ROM Medio Magazine.
Now all of those products are up for sale. Microsoft co-founder Paul Allen, who has helped finance Medio, was not willing to invest any more money this summer, Podradchik said.
Podradchik, who founded Medio two years ago after leaving Microsoft, said he hopes to avoid filing for Chapter 7 bankruptcy, which calls for total liquidation. He was meeting today with his lender, U.S. Bank.
"In the interest of paying people quickly and as much as possible, we're working hard to avoid a bankruptcy," he said.
Medio held a meeting last week for its approximately 300 creditors, ranging from International Business Machines Corp. to former employees. Thirty to 40 people attended, Podradchik said.
Despite earning positive reviews for its software titles and online service, MedioNet, Podradchik's company fell victim to a crowded, emerging computer market. Some industry observers said Podradchik may have tried to expand too fast, spreading from standard software publishing to online publishing.
Medio laid off about 40 people in June and had about 35 people left when it began negotiating with ConnectSoft in July. Of those employees, 10 to 20 went to work for ConnectSoft.
ConnectSoft, which employs about 140 people, makes e-mail software and programs for linking to online information services.
"I regret that this transaction has not come to fruition," Mitchell London, chairman and chief executive of ConnectSoft, said in a prepared statement.
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