Web search IPO stalls on underwriter doubts

NEW YORK (CNNMoney.com) -- The public offering of a start-up Internet search firm has run aground after the underwriter pulled out of the deal, according to a report published Wednesday.

The New Jersey-based Accoona withdrew its $80.5 million initial public offering, after a little-known underwriter Maxim Group said they were no longer interested in the deal after conducting their due diligence review, the New York Times reported. Maxim did not specify their reasons for backing out.

This marks the second time this year that Accoona failed in a bid to go public, according to the paper. Earlier hit year, Accoona abandoned plans to list its shares on London's AIM exchange.

Accoona told the Times it was in discussion with other underwriters and hoped to continue with the public offering.

The failed public offering marks the latest development in Accoona's checkered history, according to the paper. Three years ago it heralded its arrival at a press conference that featured former President Bill Clinton. The company's founder, Marc Armand Rousso, has had several brushes with the law including pleading guilty to stock fraud charges in 1998, the Times reported

While the Web site has struggled to build its traffic and advertising base, relying on revenue from other holdings, Accoona's CEO defended the company to the paper.

"I can assure you that Accoona is a genuine company with legitimate operations, and one which is very excited about the potential of its products," Valentine Zammit, Accoona's chief executive, said in an email exchange with the paper.