Troubled online storage start-up Omnidrive late last week said it was continuing to develop its products and was examining the potential to merge its technology with that of other companies.

Speculation has run rife in Australia’s start-up community about the company’s future since its chief technology officer, former Kazaa executive Phil Morle, quit in August last year after just six months on the job.

In a lengthy post on New Zealand-based Web 2.0 blog Read/Write Web, Morle claimed employees had not been paid and Omnidrive’s offices in Wollongong and Sydney had been vacated. Perth-based investor and tech entrepreneur Clay Cook, who was an angel investor in Omnidrive, also wrote a public letter stating his lack of confidence in the firm.

However, Omnidrive CEO Nik Cubrilovic, who founded the firm in Wollongong in mid-2004, told by email late last week that Omnidrive was still “churning along”.

“We are doing [development] work — about to launch a new product, probably in 2-3 months,” he wrote. “We looked at a number of merger deals with competitors for the storage engine, and one of those might pan out.”

Omnidrive CEO Nik Cubrilovic

Cubrilovic said the company’s new product was a “distributed social network”, with Omnidrive’s storage technology to be part of the puzzle.

The entrepreneur has been instrumental in recent months in the launch of a new enterprise technology blog, TechCrunchIT, which is published by US-based Web 2.0 blog TechCrunch. TechCrunch founder Mike Arrington is an investor in Omnidrive.

“I am doing a lot at TechCrunch, but I have been working with Mike for three years now, since the blog was only a few months old,” said Cubrilovic. “There are always rumours; shooting down the guy next to you is the Aussie way!”

With independent sources such as Clay Cook and Phil Morle prepared to go on the record about problems at Omnidrive, there would appear to be no doubt that there is something unfortunate going on at the firm.

The fact that Cubrilovic has been doing a substantial amount of work for TechCrunchIT also does not bode well. Investors would be well justified in questioning whether he should be spending more time focusing on Omnidrive and less on aiding TechCrunch, even if such work does boost Omnidrive’s own profile.

On the flip side of the coin, Cubrilovic has also done a substantial amount of work for TechCrunch previously, before any problems at Omnidrive surfaced. And there is a reason that Omnidrive has won plaudits from commentators in the Web 2.0 space like Read/Write Web, CNET and Ross Dawson; its online technology remains quite useful if applied correctly, and this is an area that could hot up in the next few years.

Omnidrive either needs to find substantial backers so it can continue with heavy development and attracting users, or concentrate on finding an acquirer so that it can pay out its original investors. Although the firm’s reputation has obviously been sullied, Cubrilovic’s connections with Arrington and others mean he still has an inside line to Silicon Valley and could quite feasibly find a suitable exit strategy.

Omnidrive has hung around for a while and its future is probably too close to call at this stage, but with substantial challenges ahead and the hype dying down, it’s hard not to be pessimistic about the firm.

bootstrappr opinion: BUST

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