XMarks to Shut Down

Updated. Xmarks, the bookmark-syncing service is shutting down, the San Francisco-based company quietly announced on its website today. Later, James Joaquin, the CEO of Xmarks tweeted about the shutdown. The four-year-old company was started by Mitch Kapor, who initially funded the company. Redpoint Ventures later invested in the startup.

In 2006, XMarks started out as a Firefox-plugin, which allowed consumers to take their browser bookmarks and save them on the Internet and sync them across multiple computers. Over the years, the company that was once known as Foxmarks, developed plugins and extensions for different browsers. The company experimented with various different business models including new search and discovery products. However, none of those caught on.

We weren’t able to find a sustainable business model for Xmarks. The advertising you may have seen on Xmarks.com generates only a small fraction of the revenue we need to cover our operational costs; we had been working hard to create search and discovery products that could take the company to profitability and beyond, but we didn’t generate enough consumer adoption or advertiser adoption of these new products.

From what I hear, the company was pretty close to selling itself to Google. Clearly that didn’t work out. The company had about 5 million active users of its various different plugins. The Xmarks syncing service will stay live through end of 2010. Most new browsers offer syncing bookmarks as a featured offering.

Update: Xmarks co-founder and CTO Todd Agulnick recounted the company’s ups and downs in a blog post today, thanking investors and users. Joaquin told me, “We made an impressive attempt to monetize our 1 billion bookmark corpus with several innovative search products, but ultimately we didn’t find a scalable business model. With Firefox and Google building sync into the browser, it’s the end of the road for Xmarks.”