PointCast is making moves in an effort to pull itself out of financial trouble, yet is being selective about its new investment offers despite potential investors dropping out of contention.
The privately held Sunnyvale, California-based company has received at least one investment proposal from founder and erstwhile CEO Chris Hassett but has asked him to resubmit an offer that would be less restrictive and would lead more quickly to a larger deal, Hassett said.
But PointCast's negotiations continue despite one potentially large investor recently losing interest.
Softbank decided not to pitch in for PointCast's new financing efforts, said Softbank technology ventures managing partner Gary Rieschel.
"We had looked at the company, but decided not to participate," Rieschel said. "We believe there is real technology in the company, but, as you know, a turnaround [is] an immense amount of work."
And Softbank felt it did not have the resources to undertake such a financing effort, he added.
Another company that has been looking at PointCast was E*Trade, sources close to PointCast said. E*Trade executives declined comment.
Meanwhile, Hassett, who noted his investment team still is studying PointCast's financial books as part of the due diligence process, said: "Things are progressing in a normal fashion like any negotiations."
"Chris's interest in the company is not the only one," said Wendy McCarthy,
a PointCast spokeswoman.
Hassett, who hired New York investment banker Sands Brothers & Company, wants to acquire a majority stake in PointCast in exchange for an investment exceeding $15 million. The PointCast founder is interested in making the company's product more Web-centric by allowing users to access content via a traditional browser. Hassett believes media firms would be interested in a retooled PointCast.
Analysts say there is some value left in the company, which has spent nearly a year trying to find partners for a buyout or other strategic investment.
Although PointCast has lost much of the cachet it commanded at the top of the Internet "push" popularity, it still has more than a million users, many of them inside corporate offices.
"PointCast still has something of value in its community of business users," said Ron Rappaport, an analyst with Zona Research. "Community takes serious time to build, and PointCast has it right off the shelf, for the right bidder."
Others say it has waited too long to transform itself into a successful Web service.
"Obviously a couple of years ago that was a very logical model," said Maureen Fleming, an industry analyst with the Gartner Group. "Now there's a bunch of business portals and portalware vendors...They've lost any ability to achieve a competitive advantage."
Meanwhile, PointCast also has been working on ways to cut expenses. Earlier this month the company cut a third of its workforce and announced plans to refocus its business model after a consortium of telcos canceled plans to buy the company and later take it public.
As a result, PointCast is now looking to raise between $15 million to $20 million via an investment or acquisition of the company, executives have said.
The company received roughly $16 million in interim financing from the telco consortium last fall, but much of those funds have been depleted, sources said.