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NexTag’s 2007 sale was not an $830 million sale of the whole company: Providence Equity Partners paid about $830 million for a roughly two-thirds stake, in a deal that valued NexTag at about $1.2 billion. Six years earlier, the company had run out of money, owed $700,000 and was trying to stay open. Contemporary reporting describes a combination of steep executive pay cuts, a further investment from an existing backer and a much smaller workforce—not one single rescue measure.
What NexTag did
NexTag was a comparison-shopping service that helped consumers compare prices on products and services sold by online retailers. In 2007, The Wall Street Journal described the company as operating in the United States and United Kingdom. Its revenue came from advertising and fees paid by retailers and other service providers for referrals to their websites.
The Wall Street Journal’s June 9, 2007 report, reproduced by Morgenthaler, provides the account of the later investment deal and NexTag’s business model.
How NexTag faced a cash crisis in 2000
An April 8, 2005 Mercury News report said NexTag had burned through its available money by late 2000 and was carrying $700,000 in debt. CEO Purnendu Ojha gave employees two months’ notice, while he and three or four executives took pay cuts of 85 percent to help keep the company operating.
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Most employees had left by the time Morgenthaler Ventures, an existing investor, put another $1.6 million into NexTag in December 2000. The report presents the investment alongside the executive sacrifices and departures; it does not establish that the investment alone ensured the company’s survival.
The Mercury News quoted Ojha saying, “We’re focused on trying to build a very large public company.” That was his stated aim in 2005, not evidence that NexTag later became a public company. The report also quoted Morgenthaler describing the executives’ personal sacrifice and determination.
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What Providence paid in 2007
On June 9, 2007, The Wall Street Journal reported that Providence Equity Partners acquired a majority stake in NexTag for about $830 million. The stake was roughly two-thirds of the company; the article put NexTag’s total value in the transaction at about $1.2 billion.
| Reported figure | What it describes | Source and date |
|---|---|---|
| About $830 million | Providence Equity Partners’ payment for a roughly two-thirds stake | The Wall Street Journal, June 9, 2007 |
| About $1.2 billion | The value attributed to NexTag as a whole in the transaction | The Wall Street Journal, June 9, 2007 |
NexTag’s management and existing investors, including Morgenthaler, retained stakes after the transaction. The distinction matters: the $830 million was the reported price for the acquired stake, not the stated value of the entire company.
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What the reporting can—and cannot—establish
The financial and operating details here come from contemporary newspaper accounts reproduced by an early investor, Morgenthaler. They document what those reports said about the cash crisis and the 2007 transaction, but they are not audited financial statements or current company records.
The Mercury News also reported in 2005 that NexTag described its revenue as similar to Shopping.com’s reported $100 million in annual revenue. That was an attributed comparison, not a verified NexTag revenue figure; the article cautioned that sector statistics were volatile and difficult to compare. The available reporting does not establish NexTag’s present operating status.
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