U.S. Interactive aims for comeback

(Telephony) U.S. Interactive, riding high last April, was shot down in May … and August… and December, before finally crashing into Chapter 11 bankruptcy this week. As of yesterday the company's workforce had been sliced in half; the corporate headquarters moved to Cupertino, Calif., a continent away from its Philadelphia roots; and the president/CEO resigned.

An "e-business solutions provider," U.S. Interactive succumbed to the usual suspects: souring investor enthusiasm for tech companies and dot-coms.

It started "last March and April when the tech sector fell out of favor in the stock market," said Shawn Southard, the company's investor relations director. Then, he said, the dot-coms ran out of financing "and the first thing they cut is their e-business."

The final nail was hammered in when "the larger clients … realized that there was no reason for them to spend as rapidly and significantly as they had been because there was no pressure from the small dot-coms that were popping up daily. That's where we got hit."

Trying to pull out of the dive, CEO Mohan Uttarwar spent so much time "dealing with the creditors and dealing with trying to find either buyers for the company or investors in the company" that he "lost sight of the vision of the organization and where things are going," Southard continued.

Coincidental to the Chapter 11 filing, Uttarwar resigned as CEO and president, although he did remain on the company's board of directors.

Much of the company's business focus also fell by the wayside. Until August, U.S. Interactive was focused on business-to-business and business-to-consumer e-business directions, infrastructure solutions, Web site development and electronic consumer relationship management (ECRM).

"We … are now focusing on ECRM in the communications industry," said Southard.

"At our peak the company was well above 830 total employees. Of that 160 were in the Philadelphia office. Today we are somewhere south of 400 employees and we have roughly 30 in Philadelphia," he said.

Nevertheless, he said, company officials are hopeful that "under the protection that Chapter 11 offers us we'll be able to reorganize the company with a clean balance sheet and take our existing clients and focus our services and begin to rebuild," Southard concluded.