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[whitespace] Golden Bear Moving and Storage Employees
Photograph by Anthony Pidgeon

Silicon Spoils: Mario Ortiz, owner of Golden Bear Moving and Storage, helps with a truckload of equipment from yet another dotcom liquidation.

Dotcom Vultures

Widespread dotcom deaths aren't bad news for everyone. Silicon Valley movers and office equipment auctioneers have never been so busy.

By Will Harper

BEFORE RAIDING A DEAD DOTCOM, Mario Ortiz sometimes has to give his movers a pep talk. The owner of Golden Bear Moving and Storage in San Mateo knows he and his employees have an unpleasant task ahead of them. Often, employees of the failed dotcom don't even know that they're out of a job when Ortiz and his men come in to gather up all the servers, computers, desks, cabinets, mouse pads, fax machines, phones, paper clips and Post Its.

Ortiz likens his pep talks to a military officer telling his troops to focus on their mission.

"I tell them we're like the Marines right now," Ortiz says. "We want to go into this area and be quiet and make as little commotion as possible. We want to extract the items we need to extract and get out."

The element of surprise is important when executing a moving raid. The venture capitalists and other creditors that financed the doomed dotcoms want to be able to sell off everything of value in order to recoup some of their losses.

When employees know in advance that their company is going under, Ortiz explains, "Laptops have a tendency to disappear. So we've got to get in there before something like that happens."

When the employees start asking questions of the men walking off with their computers, Ortiz refers them to the auctioneer who has hired him. The auctioneers, in turn, have been hired by the VCs or leasing companies to get all the stuff in the office and hock it as quickly as possible.

Business is booming these days for Ortiz, who opened his Silicon Valley moving business a year ago as a satellite shop to his brother's business in Los Angeles.

"In fact," he says, "the deaths of the dotcoms forced us to come [and open up shop in] Silicon Valley because we were in L.A. and our clients were always sending us up here."

Ortiz handles exclusively high-tech remnants.

"Sadly enough," Ortiz says without sounding very sad, "it's a moving bonanza right now. ... I move about three dotcoms a week."

Ortiz doesn't have a lot of time to talk. He just got a call to go retrieve a bunch of office equipment from a newly deceased dotcom in Sacramento.

In nature, the death of, say, a wildebeest offers opportunity to countless scavengers. In business, the dotcom plague is the same--except that the scavengers in this case aren't hyenas or vultures, but movers, auctioneers and bidders.

Bidding Morgue

'DEATH OF A DOT COM."

That's how Able Auctions of San Mateo not so subtly promoted its recent auction in February.

The victim in this case was something of an irony: an online auction company based in South San Francisco called UltimateBid.com.

UltimateBid.com suddenly went under in late January, according to eBay records. The company merged with another Internet business, eSuperstars, in April 2000, to sell "ultimate experiences."

Those ultimate experiences were things like tickets to the Grammys or choice seats for top musical acts with backstage passes.

But by January, bidders were increasingly growing annoyed with UltimateBid and the flaky service.

"Crooks," said one bidder, who paid $660 for VIP tickets for the Backstreet Boys and a T.G.I. Friday's gift certificate in East Rutherford, N.J. "Told three days before concert I wasn't getting my tickets. I want my money back."

Another bidder, who scored two tickets to the Super Bowl with VIP passes to the Sports Illustrated party the night before for $7,105.53, groused on Feb. 1, "Got the Super Bowl seats, I did'nt [sic] get the SI party and that was the point."

According to Brett Johnston, manager of Able Auctions, UltimateBid closed its doors at the noon hour and his movers were in there the same evening. The desks and cabinets were still filled with company memos and personal effects left behind by the 100 or so employees of the dead dotcom.

"The drawers were full," he says, opening a drawer below one of the corner workstations on display. "We emptied them. But we found all kinds of stuff in the drawers. Anything personal, we throw out. I don't want anything to do with that. There would be company files, and odds and ends and stuff that are [personal] treasures."

The only stuff he keeps from the cubicles and desks, Johnston proclaims, is computer accessories or software--stuff that can be resold at the auction.

The day before the auction, scavengers mill about Able's warehouse in downtown San Mateo looking at the computers, printers, monitors and furniture.

Aside from the high-end electronic equipment, there was an assortment of more pedestrian office merchandise--workstations, wastebaskets, metal cabinets, silk plants.

Boxes in the showroom corners contain a variety of stuff that could only interest an E-archeologist: random Skittles pieces, UltimateBid coffee mugs and notepads, binder clips, staplers and staples, dry erasers and markers, unused name tags, a box of Sports Illustrated swimsuit issues, Tupperware from the dotcom's kitchen as well as a Gary Larsen mug.

Another box contains a self-help management book called Soar With Your Strengths. "Within these pages," the subhead promised, "is a simple yet revolutionary philosophy of business and management. Find out what you do well and do more of it. Find out what you don't do well and stop doing it."

Some of those browsing are from startups or family businesses, some are dealers looking to resell equipment to companies still in business, and some are just regular guys like software engineer Jason Stillwell, who wants a laptop or a piece of furniture for his Sunnyvale home.

"In years' time," Stillwell chuckles, "when I remember all those dotcoms failing, I'll be, like, I didn't miss out on it. I bought something."

The next day at the auction--with about 500 people in attendance--it takes the fast-talking auctioneer five hours to plod through the 736 items up for bidding. A 19-inch Sony Trinitron 520GS computer monitor sells for $575. A Canon GP30 Digital Copier gets snapped up for $2,100. A bidding war erupts over the green leather sofa, which finally sells for $1,100--higher than anyone expected. A set of 50 plastic wastebaskets goes for $35. Someone snags four walnut desks for $1. Six corner workstations sell for under $10 apiece. A signed Sammy Sosa print fetches $90.

Ray Brayer, a Burlingame businessman who designs office suites, came away with a Tip Off indoor basketball game for $300 (for his two sons, he insists) and five stepstools for $15.

"There were some really good deals to be had on the nontech items," Brayer says.

A few days later, the warehouse is practically empty. Everything that once belonged to UltimateBid.com is gone--even the Skittles.

Dotcom Vultures

ANDY ALEXANDER SAYS HIS company, Cowan Alexander Equipment Group, held 44 dotcom auctions last year. By the end of March, he predicts, Cowan Alexander--which will be selling off assets from Red Gorilla, BestOffer.com and Telesmart.com in Pleasanton on March 16--will have done 25 dotcom auctions in the first quarter of 2001 alone.

Over the past year, his staff has swelled from about 10 to 40 employees.

"We've been extremely busy, to say the least," Alexander says.

Jeff Crowe, president of DoveBid Auctions in Foster City, says DoveBid had one dotcom auction all of last year. In the first two months of 2001, DoveBid has held eight.

"You weren't doing any dotcom auctions one year ago. ... Dotcoms have just taken off as a new part of the [auction] market," Crowe says.

Ron Charyn, of Charyn Auctions in San Francisco, estimates that his business activity has gone up 25 to 30 percent because of the dotcom collapse. Charyn just held an auction a few weeks ago selling stuff--including Sun servers, Dell PCs and a Fender Stratocaster signed by Blink 182--his company acquired for a reported $4.5 million dollars from Big Words Inc., TechPlanet, iOwn.com and Craft Internet Holdings Inc.

"A lot of people look at us as the vultures," Charyn acknowledges, "but somebody has to dispose of this equipment."

Bankrupt companies have always been a core supplier of the auction market, auctioneers say. But the explosion of dotcom deaths has perhaps made auctioneers seem more scavengerlike than usual.

According to Crowe, during the economic boom of the '90s, auctioneers like DoveBid were dealing mostly with surplus equipment from thriving companies who were upgrading.

Crowe predicts that dotcom scavenging will continue for a long time--or at least as long as the economy continues to stumble.

"This may not be a popular view," Crowe says, "but I think we're just getting started."

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From the March 8-14, 2001 issue of Metro, Silicon Valley's Weekly Newspaper.

Copyright © 2001 Metro Publishing Inc. Metroactive is affiliated with the Boulevards Network.

For more information about the San Jose/Silicon Valley area, visit sanjose.com.




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