ArsDigita: Classic DotCom Flameout

By Deane Barker on June 26, 2003

I’ve been reading a lot lately about the rise and fall of ArsDigita. This company grew from five people in the late nineties to 240 people in five offices doing $20 million in revenue by 2001. They did high-end Web development, and open-sourced the ArsDigita Community System (www.openacs.org).

Somewhere along the way, they took $38 million from a consortium of venture capitalist firms and that seems to be where the downward spiral began. Three of the principals have posted their versions of the story: Eve Andersson, Michael Yoon, and Phillip Greenspun.

The stories often contradict each other, and there’s some obvious backbiting, but it’s a fascinating tale of expansion and collapse until they were finally put out of their misery by RedHat last year.

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