Dot-com Duds and Delights

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From: Janie Wilkins (
Date: Wed Dec 20 2000 - 11:00:33 PST

Culled from the AP Newswire on Dow Jones... a nice start to summarizing
the dot-com duds and delights 0f 2000, but I am sure we on FoRK can come
up with a more comprehensive list than this. Nominate your favourite
dot-com dud or delight today!

                     CASH PRIZES AND KIBBLE: Good, bad and plain ugly
dot-com ideas of 2000
                     By MICHAEL LIEDTKE
                     AP Business Writer

                     Associated Press Newswires
                     Copyright 2000. The Associated Press. All Rights

                     SAN FRANCISCO (AP) - The dot-com fairy tale turned
into a macabre farce this year as one
                     e-commerce company after another flopped and
business bystanders clucked about the
                     stupidity of it all.

                     But it wasn't so long ago that plenty of smart
people thought selling dog food, plush sofas
                     and barbecue grills over the Internet were good

                     Today's prevailing consensus about the absurdity of
these e-commerce concepts
                     illustrates how much the dot-com landscape has
changed in the past 12 months. The
                     Young Turks of the New Economy, once hailed as
inspired visionaries, now widely are
                     derided as shortsighted buffoons.

                     "There always have been dumb ideas in business, but
you don't usually see so many of
                     them at one time," said Philip Kaplan, who runs a
Web site with a profane name that
                     features a satirical dot-com dead pool for Internet

                     Marc Benioff, a former Oracle Corp. executive who
is chairman of San Francisco-based
           , said he couldn't believe some of
the business decisions made at other
                     dot-com companies during the year.

                     "A lot of these guys were writing Harvard Business
School case studies, but they weren't
                     writing them on how to build a business," Benioff
said. "They were writing them on how to
                     torch a business."

                     Amid all the dot-com detritus, a few clever - and
even potentially revolutionary - ideas
                     emerged during 2000, too.

                     Here, then, is a look at some of the year's dot-com
duds and delights:

                     SUPER DUMB

                     Super Bowl XXXIV was billed as a coming-out party
for the 13 dot-com companies that
                     shelled out an average of $2.2 million for
30-second commercials aired during the game.

                     The ads were plenty slick, but they didn't
accomplish much - they mostly attracted
                     customers who discovered that the featured sites
were more about style than substance.

                     "A lot of these companies forgot that good
advertising only makes a bad product fail
                     faster," said Clark Wood, vice president of
marketing for, one of the few
                     e-commerce Super Bowl advertisers that didn't
regret spending all that money.

                     At least two of the Super Bowl dot-com advertisers
- and - have
                     since closed their doors and several others are
struggling to survive.

                     DOGGONE DUMB

                     Online pet stores seemed to multiply faster than
rabbits until fickle financial markets
                     performed their form of euthanasia.

                     When the year began, there were five major online
pet e-tailers -,,
           , and
Together, they raised roughly $400 million
                     from venture capitalists and the stock market.

                     As the year ends, just two of the original five, and, are still
                     peddling dog food over the Internet.

                     If it weren't for all those stupid pet tricks,
online furniture stores might have been e-tailing's
                     biggest debacle of the year.

                     As it was, three high-profile furniture e-tailers -, and
            - wound up taking a bench seat this
year. Turns out most people want to sit
                     on a sofa or recliner before they buy it. And
apparently someone forgot shipping all that
                     heavy stuff to people's homes costs a whole lot of


            was financially disadvantaged from
the get-go. The Hayward,
                     Calif.-based company built its entire business
around the idea of paying its members to
                     surf the Web. The company promised to pay anyone 53
cents per surfing hour as long as
                     they used an AllAdvantage browser that kept an
advertising bar on their screen at all times.

                     It didn't quite work out the way that AllAdvantage
envisioned. The company budgeted for just
                     30,000 members in its first four months. Instead,
millions signed up for the service,
                     costing AllAdvantage $33 million in its first three
months alone.

                     Last month, AllAdvantage laid off 35 percent of its
work force - about 150 employees - and
                     promised to develop a new business strategy.

                     Then there was San Francisco-based, which
thought it could cook up an online
                     business from the $18 billion per year industry for
barbecue grills and all their fixings. The
                     company got skewered instead.

                     And sounded like a plot out of an old
Seinfeld episode. The site aimed to
                     become the world's leading breakfast cereal portal.
In June, it became a site about

                     ON THE UPSIDE

           , a fast-growing online payment network,
may emerge as the year's most
                     significant breakthrough in e-commerce. The Palo
Alto, Calif.-based service and its holding
                     company,, allow merchants and consumers to
set up online financial accounts and
                     then send digital cash payments through e-mail.

                     Founded by Peter Thiel and Elon Musk in late 1999,
PayPal opened more than 5 million
                     online accounts this year and is adding about
600,000 new members each month.

                     Now comes the hard part: making money. After
offering the service for free at first, PayPal
                     began imposing a service fee on its heaviest users.

                     In another sign of how a simple idea can turn into
something big on the Internet,
                     established itself as one of the Web's most popular
destinations with a familiar promotion:
                     a sweepstakes. The site offers cash prizes to its
visitors every day. The more frequently
                     that surfers click on iWon's site, the better
chance they have of winning.

                     The result: iWon boasts one of the Web's most loyal
constituencies - precisely the kind of
                     traffic that appeals to the advertisers that
ultimately pay iWon's bills.

                     The Irvington, N.Y.-based site's sweepstakes
system, conceived by co-founders Bill
                     Daugherty and Jonas Steinman, isn't cheap, but it's
not as expensive as it might look.

                     The company awards $27 million in prizes per year,
including a $1 million monthly prize
                     and a $10 million jackpot on Tax Day, but because
the money is paid out over 25 years,
                     iWon actually spends about $17 million annually.

                     IWon's pockets are deep. It has raised $205 million
so far and its investors include media
                     giant Viacom Inc., which owns about one-third of
the business.


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