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Story URL: http://management.silicon.com/smedirector/0,39024679,11025328,00.htm

Scoot searches for silver lining in very black cloud...
Its share price has collapsed, its CEO has resigned and one-fifth of its staff will have to go. Still, things could be worse...

By Joey Gardiner

Published: Wednesday 27 June 2001

Shares in troubled directory service Scoot.com have collapsed on the back of this morning's news that it's on the verge of running out of cash and will start charging consumers for information.

In a statement released to the stock exchange earlier today, Scoot confirmed that its chief executive, Robert Bonnier, and other executives had resigned and that 285 employees - one-fifth of the company - will be made redundant.

Scoot's share price had plummeted 60 per cent by 10.30(BST), languishing at just 2.75p. Investors are now wondering how the firm will be able to find a way out of its dire predicament.

Last month, Scoot - which owns free ads firm Loot - announced it was conducting a strategic review in the light of ongoing problems in its business. In June it emerged that the company had failed to agree a widely touted buyout by major shareholder and media giant Vivendi.

Scoot said today "the group currently does not have sufficient working capital for its present requirements", saying it will run out of cash within the next 12 months. Contrary to reports in the press last week, the statement confirms the company has failed to secure the further round of funding needed to put off its problems.

Scoot said it has appointed Dick Eykel, previously non-executive chairman, to be an interim executive chairman until a permanent chief executive can be appointed. It's also looking for a new finance director.

It intends to make money from its service by charging consumers, reducing discounts to business advertisers and stabilising its technology. Scoot cites technology problems with the update of its redesigned site - Scoot Version 2 - as a major factor in its troubles.