BusinessTN

When Las Vegas entrepreneur Michael Calderone relocated ZOI Interactive Technologies from Nevada to Nashville’s Cummins Station last November, there were plenty of smiles in state economic development circles. Media scrutiny went little beyond press release paraphrasing and coverage of the “Chalk up another corporate relocation for Tennessee!” variety.

“Local officials bent over backwards to have us here,” says Safa Homayoon, ZOI’s operations chief. And who can blame them? Nashville has been ready for a high-tech success story since the dot-com busts of the late 1990s. ZOI’s business model revolves around Internet-based casual gaming, a burgeoning niche on the Internet. The games—such as poker, checkers and other more sophisticated endeavors—capture consumer attention for hours at a time, where they can be bombarded with third-party advertising. (ZOI also delivers powerful demographic information about its players to advertising clients.)

The relocation was spurred by more than municipal appeal—the company cited its desire to be closer to its Nashville investors. Though Tennessee native Homayoon declined to reveal any names, well-placed sources in the Nashville technology community say one of those investors is entrepreneur Farzin Ferdowsi, brother of PayMaxx founder Farsheed Ferdowsi. Another says Bob Dupuis, former chief of now-defunct Bluestar Communications, is advising ZOI.

Yet ZOI shares enough in common with its extinct dot-com predecessors to merit more careful, if not outright skeptical, attention. While ZOI’s 20 employees, clad in T-shirts and flip-flops, work on a host of interactive online games and other entertainment options in the company’s 16,000-square-foot, sparsely accommodated office space, little actually exists as of yet. Despite an ambitious slate of projects—the building of a portal for real-time fantasy sports games, a music video-making tool and myriad other online applications—at press time, the only functioning link on the company’s Web site was Tournament Games, a gaming firm formerly based in Lebanon, Tenn., which ZOI is in the process of acquiring.

And then there’s ZOI’s merger with Colorado construction firm CET Services. Traded on the American Stock Exchange since 1995, CET stated in its recent annual report that it had incurred $736,000 in net losses during the last two years, with outstanding notes of $1.4 million. Three-employee CET has also been under investigation by the Environmental Protection Agency. The company expects to wind down real estate operations to focus on gaming software, transferring property worth $606,000 to CET CEO Steven Davis as a result of the merger. Though reverse mergers between companies from disparate industries are not unheard of as a back-door method of gaining public company clout, the maneuver in this case is yet another reason the jury is still out on the long-term merits of ZOI’s relocation.