I agree. They had to know they'd confuse and alienate people by changing the name of the service _and_ creating an whole new website for people to figure out. But it does allow them to extract the highest value should they sell it off later (and they will).

With plans to sell there was only two things that would have been even more bone-headed than what they did:

:a => "Sell it as Netflix DVD (or something like that) and have two companies named Netflix running around."

:b => "Sell it and force the acquiring company to change the name, in which case they would have to accept a huge discount on the value of the business."

I read this and immediately thought of a recent freakonomics podcast: http://freakonomicsradio.com/the-power-of-poop.html

As someone who suffers from IBS and lactose intolerance, I am excited about the possibility of this field of research.

I don't know much about VC, but just in my "main street" experience people always get shaky before stroking a big check. When it comes time to sit down and send away a lot of money on a business, a piece of property, whatever, that is when the doubt begins to creep in.

It could be that they loved seomoz but weren't that excited about the industry. Or, like Rand mentioned, they were nervous about the market. The July numbers probably wasn't the reason they pulled out, but it probably was the excuse they used internally to rationalize the decision.

I was thinking the same thing. If we still had to feed ourselves by hunting mammoth with nothing but pointy sticks and sharp rocks we probably wouldn't live much longer than 18 even today.