Boo technology back up for sale

The internet firm which bought Boo.com's technology platform for a fraction of its development cost last year is facing a cash crunch of its own.

Shares in the group, Bright Station, fell almost 30% on Monday following an admission that its cash reserves had fallen to £7.4m at the end of March, down from £16.3m three months earlier.

The group's founder and chief executive Dan Wagner and the rest of its board of directors are believed to be stepping down, amidst talk of job cuts and the selling or closure of some of the group's e-business units.

Going forward, the group will focus on its knowledge management unit, SmartLogik, whose board is expected to step in as Bright Station's new board.

Cash requirements

Bright Station bought the technology that allowed Boo customers to view three-dimensional animations of the clothes they wanted to buy.

It picked up the technology, which cost many millions to develop, for just £250,000 after the high profile collapse of lavishly funded European e-tailer Boo.

The intention was for Sparza - Bright Station's e-commerce business - to rent out the technology solutions Boo developed to consumer retailers.

Now Bright Station, which needs to raise fresh finance by the end of June, is putting Sparza - and that Boo technology back on the market.

Rival rises

The group had previously agreed a convertible bond facility with the investment bank Credit Suisse First Boston which would pay out an initial £2.5m.

However, this bond would require Bright Station's market value to be above £30m when the deal was signed.

When trading ended on Friday, the group was valued at £36.4m, but during Monday morning's selling of the shares, its market value fell below the £30m mark.

Mr Wagner had previously delayed plans to float the SmartLogik unit. Now, this is not an option, the group said.

On Monday, shares in SmartLogik's competitor Autonomy rose sharply.

Wagner's future

Mr Wagner has expressed an interest in acquiring some of Bright Station's e-commerce assets.

These include Sparza, which holds the Boo.com technology, and Officeshoppers.

However, no firm offer is on the table.

Bright Station has undergone a lot of change since it was founded fifteen years ago.

During the 1990s, the group ran into financial difficulties after it acquired the financial information company Knight Ridder, later Bridge.

At the time, the group changed name from Maid to Dialog.

The rights to the Boo name was bought by US e-tailer Fashionmall.com, which has relaunched it and continues to operate Boo.com as an online store.