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May 13, 1997updated 05 Sep 2016 12:26pm

NETS INC FILES FOR BANKRUPTCY AS OWNER FAILS TO FIND BACKERS

By CBR Staff Writer

Nets Inc, the Cambridge Massachusetts internet commerce company headed by former Lotus Development Corp founder Jim Manzi has filed for bankruptcy protection. The move came on Friday after Manzi failed to raise sufficient funding from external backers and revealed in a memo to Nets Inc’s employees that, I alone have been funding the company for the past few weeks at a cost of some $500,000 a week. The funding came from his own private fortune. Manzi made $78m when he sold Lotus to IBM Corp back in June 1995. All but 15 of the company’s 200 employees will be laid off. Manzi joined Nets Inc (formerly Industry.Net Inc) in January 1996, three months after he had resigned as senior vice president of IBM. Nets Inc provides an electronic business-to-business market place on the web where companies list their products and customers purchase goods with Nets Inc handling the entire transaction. Companies pay a listing fee and Nets Inc hoped to charge a commission on every sale transacted. But the second half of the vision never came into being and Nets Inc was never much more than an electronic catalog. The complex software needed to handle the buying and selling is still not ready and as more and more companies construct their own web sites, their need for Nets Inc has diminished. Revenues fell from over $1 million a month to $100,000 a month and the inevitable slide into bankruptcy became irreversible. The capital required to turn the company around is substantial and it seems that, with internet stocks down from their recent giddy heights, investors are less impressed with the prospects of yet another Internet problem child.

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