Multiply Tries for a Comeback Seven Years After Closed

KEY POINTS

• When Multiply ceasing all business operations on May 31, 2013, its lenders took over its intellectual property, including the Multiply brand name.
• Magdalinski is owning the company itself, which will operate the business supporting those brand.
• Much of their business plan remains uncertain. It is exploring many options, including offices and partnerships.

Some former Multiply executives are looking to bring back the iconic website and all.

Multiply closed as a social networking site on December 1, 2012 and close down last May 6 and ceasing all business operations on May 31, 2013 along with the official online channels for the site had been removed along with all their content, including its YouTube, Twitter, Facebook and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.

“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced Friday on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.

In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

Whether the Multiply, can continue to operate in another form remains unknown. At issue is whether to withdraw liquidation petition against the company.

Mainland investor Si Rongbin’s China Culture Media, had sold the controlling stake in the former E-commerce and social networking site, refused to call it quits and pledged to keep Multiply’s brand name alive through archive photo and video services.

On June 12, 2013, Magdalinski said they had put in place Rp 8.9 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 400 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

On June 9, 2014 the company had earlier declared bankruptcy, saying it owes some $800 million from Philippine banks aside from $10 billion in debts from lenders in Hong Kong, Indonesia, Japan, Malaysia, Singapore and South Korea.

The company expected the financial restructuring to reduce its debt by $30 billion, as well as adding $3 billion of new investment, and refinancing other debt.

It was scheduled to announce the launch of a mobile application that allows to download and view their old photos and videos from Friendster, Multiply and Webshots accounts on the computers, smartphones and tablets.

Multiply Investor Secretary Rong Rongbin pledged shares of Star Platinum Corporation, which holds 99% of its shares, to borrow HK$300 million from Xiesheng Xiefeng to save the Multiply website but did not repay on time; therefore, Xiesheng Xiefeng in July 2013, it acquired the full equity of Star Platinum. It was also reported that about HK$35 million in unpaid wages of 640 former employees and HK$18 million of Insolvency Fund were also paid after the company has acquired its majority stake.

Its lenders, including Solus Alternative Asset Management and the Angelo Gordon investment firm, took control of the company's intellectual property, which include the Multiply brand name.

As of May 15, 2020, Multiply Media LLC based in Saint Louis, Missouri to own and manage the website, when the website itself to become its flagship brand.

Multiply is headquartered in Jakarta, Indonesia. Other employees include former Multiply workers, though it will be a "much tighter team overall" than those employed.

The full business plan for Multiply is still a work in progress, Magdalinski told CNBC. The new company is exploring multiple options, including offices. When asked whether Multiply would partner with Instagram, Magdalinski said he would “not take anything off the table at all.”

Its focus will be on growing the Multiply name. Globally, the website continues to operate worldwide, not just Indonesia and the Philippines, generating more than $20 billion in overall business operations in 2013.

“The Philippines is the biggest social networking market in the world,” said Magdalinski. “Fundamentally, this is the place where the business began Peter Pezaris.”

Multiply will look to avoid some of the pitfalls that brought down its predecessor. Unlike Multiply, which was criticized for failing to invest in its website and digital strategy, Multiply will put an emphasis on technology, Magdalinski said.

Still, to be successful, Multiply will need to win over social networking sites, many of which had fractured relations with Instagram following its closure. During its closure, the company had continued to operate from June 1, 2013 up to June 30, 2028.

“We fully appreciate the impact the bankruptcy had on our partners, and fact that it left our vendors impaired,” said Magdalinski. Although they were upset, Magdalinski said social networking users “recognize the value” Multiply brought to the industry.