When do you know things are getting frothy? When a "search and e-commerce" company that has lost more than $80 million over the past three years is filing for an IPO. Things are really bad if this deal actually comes off.

I'm not sure how a search company that hasn't updated the press section of its web site in more than two years is doing $150 million in annual revenue, but apparently Accoona is. It has no venture backing, so the fingers won't be pointed that way if public investors actually fall for this. However, there are some tidbits in the S-1 filing that make that unlikely. These are direct quotes from the filing:

- "In 1999, in the case titled The Government v. Rousso and Laroze, Mr. Rousso [company co-founder and stockholder] was convicted in France of, inter alia, securities fraud, and as part of the proceeding he was credited with time served and fined 120,000 euros."
- On November 1, 2004, we entered into a Consulting Agreement with SPBD (a company wholly owned by Mr. Rousso, who is a co-founder and a substantial stockholder of ours). The agreement, which was subsequently amended on March 15, 2005, September 1, 2005, December 31, 2005; and August 4, 2006, is for strategic planning and business development services,
- On May 29, 2007, we entered into a Consulting Agreement with Kosai International Limited (“Kosai”). Jean-Gabriel Ture, a member of our Board, holds a 30% interest in Kosai and has served as one of Kosai’s director since 2004... We currently pay Kosai on a daily basis at the rate of $1,113 per day.
- Mr. Pfeiffer [former Compaq CEO who had been chairman of Accoona since 2004] resigned as a member of the board of directors in March 2007.

There's a lot more sordid reading in the filing. But, it all points to an offering that should never see the light of the public markets.

For more on Accoona's IPO filing, see:
John Battelle
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Tags: accoona, ipo, vc, venture+capital