Yahoo! Loss was the Killer: Goodmail CEO
By Ken Magill
The single most damaging event for Goodmail was the loss of Yahoo! a year ago, according to Goodmail CEO and co-founder Daniel Dreymann.
“That single event was the death knell,” he said, sounding surprisingly upbeat for a man being forced to shut down his company after eight years of hard work.
Goodmail announced to customers last week it would be shutting its doors today.
“It is with great regret that I must inform you that Goodmail will cease operations on Tuesday 2/8/11,” said a note from Dreymann. “We will continue to provide CertifiedEmail tokens until Tuesday 2/8/11 5pm PST at which time our Token Generators will be taken offline.”
The firm was reportedly in talks to be acquired by Symantec, but the deal fell through and Goodmail didn’t have the cash to continue as a standalone company.
“One of the terms when you get the term sheet [for a possible acquisition] is exclusivity,” said Dreymann. “It means you must break off all discussions with other parties and concentrate on this one party. In most cases it ends up in a merger. In our case it didn’t. As a result, I had no other choice but to shut down the company because I ran out of money.”
Return Path CEO Matt Blumberg said he considered acquiring Goodmail but decided against it.
“We reviewed a potential deal, and we decided that the price Goodmail was asking was too high for us to achieve a meaningful return on the deal,” he said.
Launched in 2005, Goodmail’s CertifiedEmail service guaranteed the delivery of email messages with links and graphics intact in certain ISPs’ inboxes to mailers who purportedly met certain non-spamming standards and paid a fee.
The messages would appear in people’s inboxes sporting a blue-ribbon icon indicating the message was from who it purported itself to be from and that it was safe to open.
At its peak in the fourth quarter of 2009, Goodmail had deals with AOL, Yahoo!, Comcast, Verizon and reportedly had a pilot deal with Hotmail.
However, Yahoo! ended its agreement with Goodmail in 2010 and the loss was too much for Goodmail to overcome.
“We were profitable at the end of ’09,” said Dreymann. “Then when we were unable to renew our agreement with Yahoo! in 2010, we walked off a cliff.”
He added his next venture will not be one that depends on the participation of so few partners.
“In email boxes, there are maybe five guys that matter,” he said.
Dreymann is now selling off Goodmail’s assets and intellectual property. He said the contracts Goodmail had with the ISPs cannot be sold.
“The contracts are not really something we can sell because we were unique. But there’s a lot of intellectual property. A couple dozen parties have expressed interest in acquiring it,” said Dreymann. “The hardware’s been sold already, but that’s not real money. You get cents on the dollar.”
Blumberg indicated Return Path’s and Goodmail’s business models were so different, there’s not a whole lot of value for Return Path in Goodmail’s intellectual property.
“We always consider buying assets that are relevant to our business, but our approach to the deliverability and certification business has always been very different from Goodmail’s,” he said.
When asked what he plans to do next, Dreymann said: “I’m going to take a short break, and then I’m going to found something new. It may or may not be in email. I’m an entrepreneur at heart.”