Nearly two weeks ago Red Gorilla, which markets its flagship time tracking and invoicing application Gorilla Time, became yet another dot-com casualty and shut down its site. The privately-held company is turning over its 65,000 or so users to Officetool.com, a provider of online communication, collaboration, and organization tools, said Andrew Garcia, an Internet strategist for Officetool.com.

"We're taking over their intellectual property and software but have not taken over the fiduciary agreements," said Garcia.

Garcia said that Officetool.com will have the site up and running within the next week and all customer data is intact. At this time, Officetool.com does not plan on changing Red Gorilla's name, he added.

"All we really wanted is the time and billing solution," said Garcia. "Obviously, the product has been proven and is something we were looking to build out ourselves."

As a provider of Web-based time and billing applications, Red Gorilla locked horns with similar Internet companies such as Los Angeles-based Elite.com, Boston-based OpenAir.com (formerly known as Timebills.com), and Irvine, Calif.-based TimeLedger.

John Witchel, Red Gorilla's chief executive, could not be reached for comment. However, in a recent interview with CNET News.com, Witchel said the company had been close to raising between $10 million and $20 million in a third round of funding, but the investor backed out of the deal at the last minute. When a last-minute attempt to secure a bridge loan turned fruitless, the company called it quits and laid off about 90 employees.

"The problem wasn't the business; the problem is the capital markets," Witchel told CNET News.com.

Red Gorilla's primary investor was Utah Ventures, according to the news report.

Like many application service providers, Red Gorilla established partnerships with other online service providers, such as San Mateo, Calif.-based NetLedger.com, a provider of Web-based accounting applications for small businesses. Garcia said Officetool.com will work to maintain those partnerships.

Evan Goldberg, NetLedger's president and CEO, said, "We will certainly talk to Officetool.com about continuing a partnership, and we'll see where that goes."

Goldberg added that Red Gorilla's demise suggests that niche providers will need to expand their service offerings in order to survive the dot-com war.

"I think one of the key messages of the situation is that niche providers will have trouble raising money in this market," said Goldberg. "Small businesses don't want to go to a bunch of different ASPs for their business management applications."

He added, "We are concerned that small businesses don't lose faith in the ASP model because of news such as this. Small businesses do need to choose ASPs carefully, but there are players out there who are here to stay."

-- By Antoinette Alexander

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