Free e-Commerce Zlio.com Shutting Down

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Today Zlio sent me an email stating that due to financial problems they are permanently shutting their doors. Zlio.com was a free e-commerce service where users could create online stores within minutes and earn pay-per-click fees as well as commissions from products sold. Here is the slightly abbreviated content from Zlio that email:

Six years after its launch, we regret to announce that we are going out of business.

The service will officially end on September 11!

Zlio had a fantastic start, receiving capital from one Europe's largest venture capital funds, Mangrove Capital. In addition, we held advanced M&A talks with Google, which unfortunately fell through at the last minute.

Our strong initial growth was interrupted on September 27, 2007, when the majority of Zlio shops, which were generally very well ranked, saw their Google ranking drop dramatically, eliminating 65% of our traffic.

Despite our best efforts, and the opening of 380,000 stores to date, it has not been possible to regain our previous Google rankings, except in exceptional cases.

When we founded Zlio, we thought that you, members of Zlio, would successfully promote your shops among your circles. We did not believe that Google referencing would be so crucial. Unfortunately, it has proved to be indispensable.

Among the actions taken to improve our Google ranking, we approached an SEO company who claimed they were able to fix our problem.

In view of their poor performance, we assessed that this company had not fulfilled its obligations. Therefore, we entered into dispute with it, which resulted in a court case whose sentence was rendered on July 26, 2011. This ruling is available on the website of the Paris Commercial Court (Tribunal de Commerce de Paris).

This decision sentences us both to pay the whole of a service that we still believe have not been provided and to pay damages for publishing our opinion about Referencement on Twitter. The latter part of the sentence has already drawn much attention in the French media.

This sentence means we cannot go on. The service has been losing money for several years (which forced us to gradually reduce our staff), and the amounts to which we are sentenced to pay today no longer allow us to meet our obligations.

Nevertheless:

- We will settle all the commissions due to our members. If you have validated commissions, you are invited to collect them as soon as possible via your administration interface.

Click here to go to your administration interface : http://blogspace.zlio.com/admin/index.php?page=Commissions

If you have pending commissions, you will be able to collect them within the next few weeks as the merchants validate them.

- The Premium subscriptions that will still be active on September 11 will be reimbursed automatically in the next few days as Zlio commissions prorata their remaining months of subscriptions.

The shops will close on September 11.

The owners of active domain names registered through our service will soon receive an email with the information required to transfer their domain name to another website.

Thank you all for your trust!

We are proud to have invented such an innovative tool, but it soon became clear that our success was too dependent on search engine optimization, which we did anticipate.

Thank you all for your support, and see you soon!

The Zlio Team

PS: Throughout this period, our support is reachable by email to answer any questions at the address: http://www.zlio.com/help/contact
News about the service will be regularly published on our Twitter feed: http://twitter.com/zlio