Global Brain ends in a terminal drain

Friday 15th June 2001

Grant Ryan

By Chris Hutching

Time has run out for 25 staff at Christchurch-based NBCi (NZ), the company formerly known as Global Brain, which is closing for business after revenues from its US parent company dried up.

But the 31-year old founder, Grant Ryan, said the scenario was far from doom and gloom.

Although he would not disclose the terms of the deal, he and others at the company will walk away with a handsome redundancy negotiated when the company was sold to US-based NBCi, an internet subsidiary of media giant NBC, for a multimillion dollar sum about 12 months ago.

Some staff are looking at setting up their own companies and Dr Ryan and others are investigating buying back the search-engine intellectual property from NBCi, among other business options.

"It was a crazy time especially in San Francisco. In hindsight you can see it was coming but we never really saw the heights or the lows here. But San Francisco is a very different place now compared to 18 months ago. There are many households where couples formerly had two high-paying corporate jobs and million dollar homes but now they're out of work and can't pay the mortgage," Dr Ryan said.

"In spite of what's happened I wouldn't have missed it for the world. Eighteen months ago there all these dotcom companies with millions to spend and they wanted to be promoted so they'd go to the portals and sign up deals with say a health provider which would give NBC $20 million to be their online information and service provider.

"At the time it looked as though they were getting lots of revenue for nothing. But when those dotcoms all collapsed the money that was going to come in dried up."

"NBCi didn't close because they went broke. They had $200 million in the bank and have the seventh largest website on the internet but the revenue streams just aren't there any more. So they'll be closing the site at the end of July and we may move out of our premises in the BNZ building in Cathedral Square."

Dr Ryan said one of the challenges facing Kiwi high technology companies is the distance from US markets. Other companies were interested in buying the technology but insisted the Global Brain team move to the US which it didn't want to do. Instead the team worked with NBCi for a year before consummating its deal.

"The turnover rate of employees in the US is phenomenal. If you stay in a job for two years people start to wonder if you can't get another job. Every one of the NBCi team we worked with over that period job-hopped to somewhere else and was replaced by a new person."

Dr Ryan retains faith that the internet will continue to change business practice and have a huge economic influence.

Comments from our readers

No comments yet