Cometa Networks Shutdown

What Happened

SAN FRANCISCO - Cometa Networks Inc., a company that equips coffee shops and bookstores for wireless Internet offerings, is shutting down, casting doubt on a business niche many had considered a sure bet. (Associated Press)

What the Tech Press Said

"Industry Unsurprised by Cometa Shutdown" read the headline at CRM Buyer (and other Primedia sites) Dan O'Shea reports in this article that

"I think a lot of people in the industry knew they were out to try to raise more funding," said Dave Hagan, president and chief operating officer of Wi-Fi aggregator Boingo Wireless.

Cometa had raised between $5 million and $7 million so far, several sources told Telephony, but this wasn't enough money to pursue the multimarket hotspot build-out it had hoped to fulfill.

Carol Ellison and Sean Gallagher at eWeek wrote:

The loss of the McDonald's contract may have played a major factor in that decision by Cometa's stakeholders. Apax Partners, one of the two venture capital firms funding Cometa, declined comment on the move, referring all inquiries to Cometa's vice president of marketing, Kent Hellebust.

The announcement took many customers by surprise, as Cometa had announced expansions in its network as recently as last week—inking agreements with Nordstrom and other retailers in Seattle on May 10. And just last month, the company took over Toshiba America Information Systems' SurfHere network of 350 hot spots. Other existing hot spot providers in Cometa's network included Barnes & Noble bookstores and the Tully's Coffee chain in the Seattle area.

Folks in Seattle didn't seem too worried however, with an article in the Seattle Times by Nancy Gohring reading:

Seattle Wi-Fi users may find slightly fewer hotspots because Cometa is closing its doors, but the shutdown shouldn't hurt the overall growth of the hotspot market.
Several industry experts said other providers will largely fill the gap, but at least one local Cometa outlet may drop its Wi-Fi service.

Interesting Side Story

Dan Gillmor pointed out what a lot of the mainstream media and tech media failed to -- that Glenn Fleishman's Wi-Fi Networking News actually got the scoop on this story. Glen has some interesting thoughts on having gotten the scoop on his blog, GlennLog which raises some interesting issues about how journalists should behave in this fast moving electronic world we are in -- when a story "breaks" through a posting on a blog, do you give the blog credit? What if the blog is a "niche news service" -- i.e. more than an individual's own ramblings?

Commentary from the peanut gallery

Dana Blankenhorn writes of Cometa Networks going "belly up" that it is "...to me, is very good news indeed." His argument is that Wi-Fi access should be a free service that you get as part of the price of a cup of coffee.
David Isenberg writes, " AT&T, has extended its amazing, unprecedented, unbroken two-decade long string of "every business initiative we touch turns to sh*t." WiFi Networking News reports that Cometa Networks, the paid WiFi hotspot venture of AT&T, Intel and IBM, is shutting down tomorrow."
Om Malik tells us that "his take" is that "Cometa's failure is proof that the wholesale model is not going to work."