Web site vandals strike following layoffs at Spinrecords.com

[William Knowles <wk () C4I ORG>]

http://www.signonsandiego.com/news/business/20001012-9999_1b12spin.html

By Mike Freeman
UNION-TRIBUNE STAFF WRITER
October 12, 2000

For today's slumping dot-com companies, layoffs may be hazardous to
their Web sites.

Just ask Spinrecords.com, the Carlsbad company that told the bulk of
its workers as they arrived at the office Friday that they no longer
had jobs.

Shortly afterward, someone began messing with Spinrecords.com's
Internet site. First, a 'Going out of business sale' banner appeared.
Next came a warning urging customers to not buy compact discs because
they would not be delivered. Then a link popped up that took visitors
to a chat room, where posters blasted Spinrecords.com.

No one knows who is tweaking Spinrecords.com's site. Company officials
did not return repeated telephone calls seeking comment on the Web
site and on the online music company's future.

Among the young turks of the dot-com community, the hacking of
Spinrecords.com's site has created a cyber buzz.

One Web page, which ranks dot-com business blunders, lauded the event,
calling for its induction into the site's "hall of fame."

David Banisar, a senior fellow at the Electronic Privacy Information
Center in Washington, D.C., visited Spinrecords.com's site yesterday
after reading about the hoopla.

While layoffs have led to acts of vandalism for years, Banisar said,
"it's a little different now because it's so obvious when it's on Web
pages."

"I imagine we're going to see it more often as more of these companies
go belly up," he said.

Of course, changing a Web site without permission violates federal and
state laws, Banisar said. But he said he doubts federal prosecutors
would consider the Spinrecords.com case because it would fail to meet
the typical criteria for damages to warrant pursuing by the federal
government.

Founded to give exposure to unsigned musicians, Spinrecords.com and
its parent company, Solutions Media Inc., raised $15 million last
year. But the company fell on hard times this year, laying off half
its staff in May and canceling a 60-stop tour of its flagship band at
the time, The Color Red.

Spinrecords.com is unrelated to Spin Records retail stores, which have
outlets in Carlsbad and Oceanside.

Since word of last week's layoffs, investors have been trying to find
out what happened to their money.

Former employees say they were not paid for about two weeks of work
and unused vacation.

"The officers of the company are doing everything possible to get
capital to pay off owed debts," company President Lloyd Ward said in
an e-mail message to employees. "There is a formal order of pay-back
based on class. Any company in this situation should pay out according
to the schedule. . . . Employees are first on this schedule. You will
all get paid before anyone else, as soon as we have the means to pay
you."

The message also said founder and chief executive Wayne Irving no
longer is affiliated with Solutions Media, Spinrecords.com or any of
its sister companies.

Mike Erbschole, vice president of research for technology consulting
firm Computer Economics Inc. of Carlsbad, said companies should
protect their Web sites even if they are failing. Damaged sites and
reputations are less valuable during liquidation, Erbschole said.

"If you look up and down the coast where we've had these dot-com
failures, this has been one of the issues: How do I make the
transition and control my assets during a close-down or a sell-off,"
Erbschole said.

"When you're going through something like this, companies want to be
able to sell their assets, sell their brand, sell the software they've
developed, if any, and get some money out of it. Certainly their
investors have an interest in it."


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