MightyWords.com, which created quite a bit of fanfare when it launched in March 2000 with plans to digitally distribute original short works, is closing down. CEO Chris MacAskill told PW, "The motivation for closing wasn't that we're running out of cash. It's that the adoption for digital publishing isn't happening as fast as we hoped." He said the company has about a year and a half of working capital left.
After its launch, MightyWords changed its business model several times, first going after new authors who wanted to publish on the Web, and then, in December 2000, refocusing on business-to-business document sales. As of December 2001, the company had acquired 30,000 documents from 900 content partners, including such major names as O'Reilly, John Wiley and McGraw-Hill; roughly 1,000 of those documents were exclusive to MightyWords.
Following its formation, MightyWords was spun off from its parent company, FatBrain.com, and is 53% owned by Barnes & Noble.com , which invested $20 million in the company in return for a 30% stake in June 2000, and assumed another 23% when it bought Fatbrain in September 2000 in a deal that included $16 million in cash. MightyWords received another $10 million in venture capital from Microsoft cofounder Paul Allen's Vulcan Ventures and another $6 million from two other firms.
In a prepared statement, B&N.com vice-chairman Steve Riggio said: "The closure of the MightyWords site indicates that we did not believe the market for digital content was large enough to support a separate company. We do believe, however, that e-books and other forms of digital content are here to stay and will continue to sell them through Barnes & Noble.com."
MacAskill said that he "wasn't aware of any electronic publishing that's a pay model generating revenue that's interesting." At its apex, MightyWords was selling $50,000 worth of documents per month, 85% on professional topics and reference and 15% on consumer topics. "Adoption of consumers coming to the Internet is slow, and when people find the file they want, they are so slow to pay for it," MacAskill said, adding, "the only digital publishers that are doing pretty well are those that started in digital and then went into print, such as 1stBooks and iUniverse. Print is what the publishers are falling back on. I dug in my heels on print for a long time, insisting we were a digital company. But I regret it now."
MightyWords' content and technology may be bought by outside companies if, MacAskill said, "they are willing to pay in a currency the investors are happy with--not illiquid stock." Eleven employees were let go on December 11, and the other 12 will stay until the end of February to wrap up business. The MightyWords.com Web site will exist until January 12.
