Earthlink founder Sky Dayton and Jake Winebaum, who founded eCompanies, paid $7.5 million for Business.com in 2000.

The founders later raised more than $80 million from institutional investors, and in 2004 with $10 million investment from Benchmark Capital.

ECompanies paid for Business.com with cash and stock. The stock lost most of its value during the dot-com bust.

As Jake Winebaum said in a 2006 interview with Newsweek, “When we did our refinancing in 2004, that stock was revalued and we redeemed it for $2 million in cash. So it was $2 million.”

The company that grew out of Business.com, a search engine used by businesses to find products and services, turned into a successful, profitable business.

Institutional Venture Partners invested $6.5 million in 2005, and by 2007 the company expected revenue of $50 million.

In taking acquisition offers, R.H. Donnelley won by paying $345 million for Business.com. R.H. Donnelley is currently in Chapter 11 bankruptcy proceedings to restructure $10 billion in debt.

Paying $7.5 million or $2 million for Business.com doesn’t seem like such a bad deal after all.

Source.

Good story of the ups and downs of the “lost decade”.