Palo Alto-based FilmLoop has reportedly layed off most of its staff of 30 employees after attempts to sell the company failed. This comes just eight months after they raised $7 million in venture capital from ComVentures. Co-founder Prescott Lee and a handful of core technical staff remain.
FilmLoop’s service allows users to create photo slide shows and view them via a desktop application or on websites. Competition is crushing – Slide, RockYou and Photobucket, among others, all offer competing services, and FilmLoop is dead last in user adoption.
Insiders are saying that FilmLoop made crucial early mistakes v. its competitors. While Slide and RockYou focused first on giving users the ability to easily embed slide shows into MySpace and other social networks, FilmLoop only added this functionality recently. They missed the social networking opportunity, and by the time they had products to compete with the others, it was too late.
The company is said to have “a couple of million dollars” still left in the bank and is going to continue to keep the service live. It’s unclear though that this market niche can support this many players, particularly since heavyweight Photobucket has started to focus on this as well. A final nail in the coffin – there is next to zero revenue being generated by these products, which are offered to customers for free.