Uncertain future for gossip website

The Beckhams occupy the attention of gossip websites

The future of celebrity gossip website PeopleNews is hanging in the balance after liquidators were brought in.

The site has unsuccessfully tried to find a buyer for almost two months.

But now the site dedicated to the lives and loves of the rich and famous could be closed down in a week if a new buyer is not found.

Edited by former Tatler editor Jane Procter, the service had hoped to cash in on the popularity of celebrity magazines such as Hello and OK!

Andrew Neil is an non-executive director of PeopleNews

Sunday Business publisher Andrew Neil is a non-executive chairman of the company, which was launched eight months ago.

The site is still running and none of the 15 staff at its London office have been laid off.

PeopleNews has been affected by the continuing slump in the dotcom market.

Investors

Around £5m has been pumped into the website by investors, including Ant Factory and venture capital house Syntek Capital.

Income is generated through advertising and sponsorship deals, while a subscription service is being considered.

But backers refused to invest anymore funds and PricewaterhouseCoopers was brought in.

At present PeopleNews is spending £100,000 a month but with returns of only £50,000.

Chief executive Simon Walker believes it is close to becoming profitable.

He said: "We have been trying to find new investors or a buyer for the business for the last six to eight weeks now.

"During that process it became clear that the current investors were not going to be able to agree terms with potential new ones."

Mr Walker added the group decided to "call everyone's bluff" and call in PWC in a attempt to rekindle negotiations.

He said at least four parties had shown an interest in buying the company but that it only had about a week to strike a deal before it was forced to close.