Yazam Meets To Determine Future

This week early-stage investor Yazam Inc. will host a board meeting to reevaluate its strategy and make adjustments to reach a position of financial strength and security, said one source close to the firm. Yazam, however, may simply be gasping through the smoke of its own hype.

After raising $60 million last spring from a slew of individual investors and the Texas Pacific Group, J.P Morgan, Merrill Lynch, Apax Partners, China Development Industrial Bank, Itochu International, Microdent, Bank Hapoalim and Carlyle Internet Partners Europe to fund its global expansion, Yazam went on a shopping spree.

After acquiring New Economy networking powerhouse First Tuesday in July, Yazam bought public relations firm Gregory Communications Inc. and investor relations specialist Financial Communications Associates. At the same time, the firm maintained a steady pace of investment, taking stakes under $5 million in companies like Incepto Inc. and Baobab Technologies Inc. of New York.

The dam burst, however, in November when Yazam underwent a management shake-up that ousted Chief Executive Yaacov Ben-Yaacov and President Phil Garfinkle.

Those moves were followed by a string of layoffs in its West Coast, New York and Israeli offices. Chief Financial Officer Bernie Siegel stepped in as acting CEO until a permanent CEO is named.

First Tuesday also was hit by layoffs in November, when its Australian Co-Founder Monique Haylen left the organization and, late last week, the Australian group’s Regional Chief Executive and Co-Founder, Randal Leeb-du Toit announced his departure.

The future of Yazam’s partnerships remains uncertain. One First Tuesday source said she was confident the networking events would continue, whether or not its trademark or franchise was sold. First Tuesday is a wholly owned subsidiary of Yazam, run by First Tuesday CEO Reade Fahs.

Yazam’s portfolio companies, on the other hand, were mum. CoreMarkets, an online steel industry marketplace based in New York, for example, would not comment on either its financing or its investors.

“We’ve got a very good business model and we’re moving full speed ahead,” said spokesman Larry Schwartz.

Carolina Braunschweig can be contacted at Story Feedback.