It seems that not everyone who starts a web site in Silicon Valley makes a big splash. Social.fm which was started by a former CEO of McAfee, has failed after just about two years on the Internet. For those who tried to go to the site, it is lights out. The company had previously posted a notice of their closing which occurred on July 31, 2008. In an article about the closing it stated:

“The Company is unfortunately no longer in business and therefore cannot continue its service to you. Regards,. Mercora, Inc.” Over on Social.FM home page, the company said “To our Valued Customers,. We regret to inform you and apologize for this inconvenience, but Social.FM will be shutting down the system on July 31st, 2008.” The MySpace widgets have also gone on the blink.

The Sunnyvale, Calif.-based company had launched in June 2005 and had raised $5 million from Norwest Venture Partners. It was started by Srivats Sampath, former CEO of McAfee.com, and launched with a
pretty nifty P2P radio software client .

They had planned to make money by selling ads next to music searches that were conducted on its P2P network. It eventually lost out to more visible competitors like Pandora and Last.fm, and changed its strategy. Like many other music-focused start-ups, the company had faced some tough times when royalty rates for webcasting music on the Internet were raised.

<!– /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:””; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”; mso-fareast-font-family:”Times New Roman”;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1I am sure there may be plenty of folks who are mystified by the sites closing. It appears that Social.fm was unable to draw the advertising revenue that they needed in order to be successful.

Comments welcome.

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