11/23/2009 05:12 am ET | Updated May 25, 2011

Paul Allen's Digeo Bust: Microsoft Co-Founder's "Reverse Midas Touch" Strikes Again

Microsoft co-founder Paul Allen might have hit it big with Microsoft, but his other investments have earned him a reputation as an "eccentric investor" with a
"reverse Midas touch."

Allen's latest bust is Digeo, a maker of digital video recorders. In 2002, the company received a $110 million investment infusion from Allen and several other investors, according to a report.

He really shouldn't have: Digeo, which has been suffering from lagging sales and recently had to lay off about half its staff, was just sold to cable-equipment provider Arris Group for a cool $20 million. Ouch.

Allen's other bungled investments, according to the Wall Street Journal include Metricom, Mercata, and Charter Communications:

Allen-backed startups like Metricom and Mercata were dot-com-era failures, while he lost big on his investment in Charter Communications, the cable company that filed for Chapter 11 bankruptcy protection earlier this year. Mr. Allen is Charter's chairman and biggest shareholder.

David Postman, a spokesman for Vulcan, Mr. Allen's Seattle-based investment firm, concedes many of Mr. Allen's bets haven't paid off. "There's no doubt there have been mixed results," Mr. Postman said. "That's part of what happens in the world of start-ups, particularly when you're dealing with cutting-edge technology, which is what Paul Allen does."

Luckily, Allen's got a good cushion: Forbes ranks him the world's 32nd richest billionaire, worth $10.5 billion. His recent yachting adventure in Israel also suggests he's doing all right.

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