Odeo Bought Back From Investors

Odeo as we know it is gone. After announcing itself in February 2005, the company raised a $5 million venture financing with Charles River Ventures and a bevy of angel investors. After a private beta period, the company launched in July 2005.

It’s now a little over a year later and Odeo now faces dozens of competitors, including iTunes. Founder Evan Williams has spoken publicly about the company’s mistakes, has shut down one service and has launched another. If anything, Odeo gives every indication of going sideways.

Instead of a dramatic business change along with a new round of financing, Odeo has kicked out its investors and is going it alone. Evan Williams along with Biz Stone and all other current Odeo employees have created a new company called Obvious Corp. This new company has purchased the assets of Odeo, Inc. (including Odeo and Twitter) from the investors and other shareholders. Evan told me “I decided to buy the assets myself and make Odeo and Twitter part of a new entity with a new structure and new model.”

The buyout price is undisclosed, but is presumably a little more than the $5 million in capital the company raised – Evan says it is “enough for the VCs and angel investors to be made whole (i.e., they get their money back), and the common shareholders (including co-founder Noah Glass) to make a modest gain.”

What’s the new Model? Evan says this:

Everyone I know in the web world either works for one of the Internet giants and wants to be in a startup or is in a startup that wants to be bought by an Internet giant. The grass is always greener, of course, but I believe there’s room for a different model for building and running web properties. Obvious will be a kind of product lab, which is something I’ve wanted to do for a long time. There are many details to be figured out, but the general idea is to simply build and launch things that we want to exist in the world, with a high degree of freedom. And to do so cheaply and quickly, with self-organized teams that can leverage each other’s technology, talents, and traffic. Rather than looking to be acquired, we plan to make money from the services and share it with the people who contribute. Occasionally, it may make sense to spin things out into their own entities, which get outside investment, but the company is not an incubator.

More from Evan in his blog post here.

Our previous coverage of Odeo is here.