Kevin Sproles started his business at his parents’ house in Simi Valley when he was 15.
By the time Sproles graduated from high school, he had 100 customers. He eventually moved his company, Volusion, out of his room and into an office building across the street.
Nine years later, he has 10,000 clients who use his software for their online stores. They include the Barack Obama campaign, Chicago Tribune, Michigan State University and Christian Audigier’s trendy Ed Hardy clothing brand.
The company hosts everything that has to do with e-commerce, from product display and search capabilities to sales transactions.
The Obama campaign is an example of how the company can scale its services.
The campaign became Volusion’s customer at the start of the primary season, when it was experiencing moderate traffic on its Web site. The site now sees more than 1 million unique visitors a month.
This month, Volusion rolled out a “widget” that allows customers to drop its online store capabilities on any social networking profile page. For example, Audigier could sell Ed Hardy merchandise on his MySpace page.
Volusion’s client base has doubled over the past two years and so has the number of employees now at 75. The company brought in $8 million in revenues last year.
Sproles said he’s been too busy to go to college and he has no plans to get a degree. “There just isn’t a need.”
Still Napping
The news that three shareholders of Napster Inc. sought a re-election of the company’s board in May probably didn’t rattle anyone in the corner offices of its Hollywood headquarters.
The shareholders of the digital music company hold only 1.7 percent of the company’s stock and their application to Napster’s board for nomination was shot down in June.
“These are nobodies,” said Alan Davis, analyst at D.A. Davidson & Co.
Perry Rod, Thomas Sailors and Kavan Singh are nonetheless preparing an independent proxy to seek new leadership of a company they allege hasn’t battled with competitor Apple Inc. aggressively enough.
Analysts predicted this move won’t immediately gain much traction among other shareholders. But they said if the company doesn’t show some revenue growth over the next few quarters, things could turn ugly.
“Investor frustration is high over the depreciation of share price over the past couple years,” said analyst Michael Olson of Piper Jaffray. “But Napster’s biggest issue hasn’t been Napster, it’s been Apple. You look at the size of Napster and they’re limited in what they can do.”
In the past year, the company has cut marketing costs, significantly reducing spending on Internet ads. Now, it’s waiting for a bump in revenues from its recent initiative to sell music downloads as unprotected MP3 files. These unprotected songs that can be copied or downloaded into any device are also available on iTunes, but they’re more expensive.
About 85 percent of shareholder value has disappeared since Napster shares reached $10 in early 2005. Shares were trading last week at around $1.40.
Helio Eclipse
The death of a high-flying cell phone carrier in Santa Monica shows that South Koreans overestimated American consumer demand for higher-tech communication.
SK Telecom had invested $490 million in Helio, a joint venture started two years ago with Earthlink Inc. The two companies together poured $710 million into the money-losing venture. Helio will be sold for a relatively paltry sum of $39 million to Virgin Mobile USA Inc., a joint venture of Sprint Nextel Corp. and U.K.-based Virgin Group.
Helio, known for its advanced headsets, and cutting-edge data and content services, was supposed to cater to tech-savvy youngsters and urban professionals. SK Telecom, the giant South Korean mobile telephone operator, had invested in Helio as a way to expand its business beyond its tech-saturated home country, the world’s leader in broadband deployment.
The brand will be folded into its new parent company. SK Telecom will get a 17 percent stake in Virgin Mobile.
Phone Bloom
Flipswap, a cell phone trade-in company, prides itself in reducing electronic waste. But the Torrance company is taking its environmental commitment to the forest.
Beginning this month, Flipswap will plant a tree for every phone the company recycles through CarbonFund.org. By year’s end, the organization plans to plant 25,000 trees in forests in Louisiana and Nicaragua.
About 5,000 wireless retailers use Flipswap’s technology, which provides a an estimate of how much an old handset is worth when a customer buys a new one. The retailers then issue store credit for the amount, and get a check back from Flipswap when they send in the old phone. Flipswap then sells the old phones to a secondary market abroad or recycles them.
Staff reporter Booyeon Lee can be reached at [email protected] or at (323) 549-5225, ext. 230.
