Dot-com Boom's Biggest Duds, From Flooz to iSmell 258
Carl Bialik from WSJ writes "WSJ.com looks back on some of the boom's biggest busts, and catches up with once-optimistic inventors. A creator of the unfortunately named iSmell, a USB device meant to 'print' smells transmitted by websites or videogames, says, 'It was a heartbreaking experience, because we had put so much into it.' The digital currency known as Flooz crashed and burned when a ring of thieves defrauded the company out of $300,000 using stolen credit cards. Microsoft flushed iLoo down the crapper. CueCat, meanwhile, got a second life as a bar-code reader that doesn't pick up personal information. 'The cat got butchered, but it has spawned a cottage industry,' says the device's inventor."
CueCat (Score:2, Insightful)
Re:CueCat (Score:5, Interesting)
So, the obvious result of this was that I had a small christmas tree that year decorated with cuecats (it needed quite a bit of external power, and all the cords seemed to hide a lot of the tree anyway).
Oh, the college days...
Photos/Videos? (Score:2)
Re:CueCat (Score:3, Funny)
Re:CueCat (Score:2)
annoying link (Score:4, Informative)
Article Text (Score:5, Informative)
By KATHERINE MEYER
May 3, 2006
What were they thinking?
The Internet spawned so many weird gizmos and bad business ideas that mocking dot-com duds became something of a sport in the post-bubble era. But some ideas still stand out for pure silliness. These are products and services that attracted lots of publicity -- and, in some cases, millions of dollars in funding -- before folding.
In the earlier days of the Web, "nobody seemed to care if there was a real business there," said Alan Meckler, chief executive of Jupitermedia Corp. and Internet industry pundit.
If It Seems Too Good to Be True
Take CyberRebate.com, which thought it could make money by giving stuff away for free. The online retailer, founded in 1998, sold an assortment of goods at heavily marked up prices (some items going for up to 10 times their retail values), but promised customers a hefty rebate that often amounted to 100% of the purchase price.
For example, CyberRebate charged about $1,100 for a 13-inch RCA television that normally retailed for a few hundred dollars. Buyers could get a full refund of the purchase price as long as they jumped through some hoops -- rebate forms had to be submitted by a deadline, and checks came 10 to 14 weeks later. CyberRebate banked on the idea that some percentage of buyers would forget to fill out the rebate form, or fail to do so in time, leaving the company to pocket the money.
But selling items at such wildly inflated prices just about guaranteed customers would go out of their way to get their rebates, quickly sinking CyberRebate into heavy debt. The company, founded by law school student Joel Granik, filed for Chapter 11 bankruptcy protection in May 2001, listing liabilities of $83.4 million. Much of that debt was owed to consumers who were promised rebates but hadn't received them.
Both Mr. Granik and his business partner, Joseph Lichter, settled with the Federal Trade Commission for $40,000 in August 2004 and were barred from running a rebate-based business. Some rebate claimants eventually received partial reimbursement of about nine cents for every dollar, according to a statement on CyberRebate's Web site.
Money Matters
Then there was Flooz.com, which tried to create a form of digital currency. Similar to the also-ill-fated Beenz.com, users could purchase "flooz" and give it to others as a sort of virtual gift certificate. Flooz could only be spent at participating online retailers, which included BarnesandNoble.com and J. Crew.
The company managed to raise over $50 million in funding from 1999-2001 and even signed on comedian Whoopi Goldberg as a celebrity spokeswoman before bad times hit.
According to Flooz founder and Chief Executive Robert Levitan, who previously co-founded women's Web site iVillage, the beginning of the end came in spring 2001. That's when Flooz's corporate clients began to cut back on orders for gift certificates to be used in promotional giveaways -- a revenue stream Flooz was counting on -- amid the softening economy. Then a ring of thieves in Russia and the Philippines charged about $300,000 in Flooz to stolen credit cards. The online piggy bank officially declared itself broke in August 2001.
Several other online-payment companies also failed, though PayPal survived, largely because it positioned itself as a money-transfer service. PayPal's offerings became particularly popular with online auction users, and that company was acquired by eBay Inc. in 2002.
"I would have wanted a different outcome," said Mr. Levitan, who has since moved on to start-up Pando Networks Inc., which aims to simplify the sending of email attachments. "But I am proud of what we accomplished."
The Sweet Smell of iSmell
The "iSmell," a product created by the now-defunct Digiscents Inc. in 1999, promised to enhance the Web surfing experience by engaging users' senses of smell.
By plugging iSmell into the computer through a USB port, the device would generate diffe
iSmell? (Score:4, Funny)
When the business went bad (Score:3, Funny)
Re:When the business went bad (Score:3, Funny)
darn you (Score:3, Informative)
CH4, or methane, is odorless [wikipedia.org]. If you are "smelling" methane, then what you are really smelling is one of two things: H2S (rotton eggs) or Mercaptins.
They add mercaptins to CH4 (or natural gas) so you can smell it. Easy leak detection and all...
Re: (Score:2)
Re:iSmell? (Score:2)
Creepier than observing them with your eyes, which you can do by looking up on a dark starry night?
Emmett
This device never went away (Score:2)
Basically the ideas of adding smells to other media is eternal. I even had some scratch and sniff books at a time.
The logic is simple. Smells are important, the smell of fresh coffee or baking bread really wakes me up and tells me it is morning. The smell of wet grass after a thunderstorm would r
Re:iSmell? (Score:3, Interesting)
I saw the device at GDC (guess they missed that appearance, but then, I've never been to CES so I guess it's all a wash) but didn't attend the demo. It was pretty spiffy looking though. It had a palette of about fifteen chemicals (IIRC) and some kind of odor neutralizer it would blow between smells to clear them out.
I told 'em that my favorite smell of all was the rain on hot asphalt and it ended up on their webpage under their "Favorite Smell" poll. My fifteen seconds :P
Re:That might have worked, properly marketed (Score:3, Funny)
Boo.com (Score:5, Interesting)
Re:Boo.com (Score:2)
However if you visit http://www.boo.com/ [boo.com] you'll see that the boo is apparently back. But not, as it's just a placeholder for a new service which seems to be extremely slow in arriving.
Comment removed (Score:4, Informative)
Re:Boo.com (Score:2)
Every time I view one on DSL, let alone a series of T1s, I also close the tab
Re:What was it? (Score:2, Interesting)
"1990s. Boo.com's intention was to sell branded fashion wear over the Internet; however, after spending vast sums of its venture capital, it eventually had to liquidate and was placed into receivership on May 18, 2000. Fashionmall.com now owns boo.com."
Enough said?
Nostalgia, Anyone? (Score:5, Funny)
Re:Nostalgia, Anyone? (Score:2)
Re:Nostalgia, Anyone? (Score:5, Interesting)
And hell, if you're too cheap for Amazon (and are willing to take a small risk), there's always eBay.
Letstalk.com makes B&M cell phone retailers a fucking JOKE--they literally offer dozens upon dozens of phones for hundreds less than the B&M stores--and that's before rebate. After rebate, you can get nearly anything free--RAZR, PEBL, Samsung SGH-t809, at least one of their Blackberry models... you can even get up to 5 of them free, if you're starting a family line (we recently did this and it kicks ass. Saved many hundreds of dollars, and for myself I picked up an N-Gage QD for -$50 after rebate. Don't insult it until you try it; Nokia fixed most of the design flaws with the QD revision. Basically, I'm being PAID $50 to use a very powerful, very underrated Symbian S60 smartphone. Kickass.) Just for grins we walked into a B&M retail store and asked the reps if they could give us a similar deal. They simply laughed in our faces and shook their heads.
My girlfriend and I (cue the 'liar' jokes) would've been fucking broke a long time ago if we couldn't buy our porn and sex toys online. The markup at B&M sex shops is nothing short of heart-stopping.
I'm not even going to get into fatwallet.com... let's just say that I wind up getting at least 2 or 3 INCREDIBLE deals per month. (Think over 50% off on stuff that is NEVER heavily discounted at B&M stores. Over 75% off is not uncommon. Over 90% off the typical B&M price isn't out of the question.)
The simple fact of the matter is shipping costs are nothing compared to the overhead of rent (or construction + property tax), utilities, cashiers and sales reps and customer service reps (who can't be outsourced, unlike online stores' reps), uniforms for the reps, general upkeep and maintenance, etc. We're beyond having to prove this--just walk into *any* B&M store and see how long it takes you to find something that you can't get cheaper off of Amazon or Buy.com or Outpost.com or eBay. With gas prices the way they are, I do indeed think that the internet will eventually spell the doom of the vast majority of B&M businesses. B&M currently has a lot of momentum, though, and I think it will be at least another decade or two before we see any real decline.
Making B&M obsolete isn't a joke; it's just not going to happen that quickly. Google's calendar has nothing to do with the internet retail scene. eBay is thriving, Amazon is well in the black, Buy.com is running commercials now, fatwallet.com's forums are overflowing with deal-hunters, and I seriously can't remember the last time I bought something at a B&M store that cost more than $20.
Re:Nostalgia, Anyone? (Score:4, Insightful)
They don't have to pay cashiers - but they do have to pay pickers and packers. (In fact their costs are *higher*, because they have to pay for support as well as pickers and packers - where a B&M store can (and does) pay use it's cashier for all three.) Their costs for packing materials are higher too - but they pass that right on to you.
One of the great myths that emerged out of the dot bomb era is that somehow online stores have 'no overhead' as compared to B&M store.
How Amazon et al win out over the B&M stores is volume from a single facility and from placing that facility where they can pay the least taxes and wages. (The last being a luxury that B&M stores don't have.) They can also automate and thus reduce labor costs. Generally, they handle the product less than a B&M store which also reduces labor costs even sans automation.
Re:Nostalgia, Anyone? (Score:4, Informative)
more expensive once you invite in the general public. Customers are spoiled. They must be *impressed* or at the very least satiated. On the They don't have to pay cashiers - but they do have to pay pickers and packers. (In fact their costs are *higher*, because they have to pay for support as well as pickers and packers - where a B&M store can (and does) pay use it's cashier for all three.)
Doubtful. A cashier must have a decent appearance, be able to interact with customers in a halfway friendly manner, be trusted enough around lots of cash (or at least closely monitored around lots of cash), be trained to operate the register, etc.
On the other hand, the picker/packer must be able to 1. Read the screen and 2. Pack the items and slap a shipping label on the box. Any socially-inept slob with 5 minutes of training can be a packer. Cashiers have stricter requirements, require more training, and require more micromanagement and supervision (e.g. stealing.) Support is largely automated, and the non-automated portions can be outsourced (or at the very least provided by telecommuting employees from across the country.) Support people don't even need good people skills--they just read from a script or punch out the pregenerated reply emails.
The fact that online businesses employ more people to do the job of one B&M person doesn't change the fact that those people are probably 10x more efficient and since they don't have direct contact with cash OR the public, they're a hell of a lot easier to hire and cheaper to manage. You also neglect to take into account the types of employees that
Nothing has *no* overhead, but you're fooling yourself if you think that a lack of a commercial-district building open to the public isn't saving the
Re:Nostalgia, Anyone? (Score:2)
Re:Nostalgia, Anyone? (Score:2)
Keep dreaming (Score:2)
Amazon has a lousy location (try stopping by to just have a browse and see the book and scim through it) BUT has infinite space. Well almost.
If you got even a small chain of stores you need to stock a copy of a book in everyone of them if you want to sell it.
Amazon can stock 1 copy and sell it across a continent.
Internet stores make sense for goods where
Also (Score:2, Interesting)
Kozmo.com (Score:2)
Oh well. It was nice having VCs subsidize our candy bars for a while there.
Re:Kozmo.com (Score:2, Insightful)
Re:Kozmo.com (Score:5, Funny)
Re:Also (Score:5, Insightful)
At least here in Southern California, you still can. Albertson's still will deliver groceries. But the "Amazons of the Grocery Business" (like WebVan) are long gone.
Re:Also (Score:2)
As I was working silly hours back in those days by the time I got home there was really no time to shop. The internet shop was a boon. I was even surprised when the delivery guys refused a tip.
From what I Gather they were in business for years before the dot.com and had moved from phone service to internet service. They then expanded out to other states. That and the insane price of maintaining the website is what killed them
You can still get delivery in Boston (Score:2)
Re: (Score:2)
Thriving in the UK (Score:5, Informative)
Re:Thriving in the UK (Score:2)
Re:Thriving in the UK (Score:2)
get stuff that I think looks ok , than rely on some 18 year old
packer to pick veg etc out of the almost-out-of-sell-by-date basket
that the shop wants to clear out.
Re:Thriving in the UK (Score:2)
Re:Thriving in the UK (Score:2)
Re:Thriving in the UK (Score:2)
want to buy and go at a quiet time its very quick.
Re:Also (Score:2)
I see their trucks quite often, so no, home delivery of groceries isn't dead.
Still kicking in Australia (Score:4, Informative)
It's not that I'm lazy, I just find going to the supermarket a frustrating, inefficient and depressing experience. Perhaps the original idea was just ahead of it's time?
Thriving in NZ too (Score:2)
The website [woolworths.co.nz] is very well thought out too. It saves frequently purchased items so after a couple of shops, you can do a shop by zipping through your list rather than scanning the whole inventory.
Signed
One happy, and very lazy, customer.
I'm sorry, but... (Score:5, Informative)
W
Re:I'm sorry, but... (Score:2)
Re:I'm sorry, but... (Score:2)
Kozmo.com (Score:2)
Just kidding about the porn and the scooter. If a lot of people had actually done that, they might have stayed in business. I did order a lot of $5 sandwiches though. They lost money on every delivery, trying to build "mindshare" or some silly thing. I knew it couldn't last. Alas, I do miss them though.
Re:Kozmo.com (Score:3, Funny)
PointCast (Score:4, Insightful)
PointCast was just ahead of it's time... it really needed the always-on high speed home connections that only really became widespread years after it went under.
Re:PointCast (Score:3, Interesting)
I remember when PointCast hit our network - every dingdong was running it to look 'kewl', instead it just sat there sucking up our (then) expensive bandwidth day & night.
Later on we became a "PointCast Partner" which never seemed to amount ot much.
What I want is a combination of news.google.com headlines & After Dark [wikipedia.org]'s Headlines [umich.edu] module, just to keep me on my toes of real-news vs. fake-news (aside from Fox News [foxnews.com])
Don't forget ... (Score:5, Informative)
Priceline [priceline.com] almost went bust - remember how they used to sell all sorts of stuff, including groceries at Jewel [jewelosco.com] grocery stores.
(Side note: I wonder what the going rate for jewel.com [samspade.org] is. But I digress.)
And frankly, I can't believe Peapod [peapod.com] is still running.
What about Kozmo.com? (Score:2)
Ridiculous business model. But as I liked to say, "If venture capitalists want to subsidize this, that's fine with me!"
One morning I ordered a disposable Polaroid camera from Kozmo. A couple hours later, I noticed that th
Re:Don't forget ... (Score:3, Interesting)
I probably was a prime candidate for Webvan. But I really didn't like the idea of letting someone else pick out my perishables (meat, produce, etc.). So I never even thought of hitting their site. Then, in a particularly busy month, the family car broke down. We were out a car while it was in repair and by the time I got home from work - it was very late. So my wife made a q
WebVan is actually the winner. (Score:2)
Anyone can lose a few million dollars in VC money. Losing a billion take serious style.
Re:WebVan is actually the winner. (Score:2)
iSmell (Score:2, Funny)
This stuff is small change. (Score:5, Interesting)
I remember seeing some TV show back around 1992, some analysts from Bolt Beranek & Newman said they had a bet in their office about what company would be the first to lose $1 Billion in cash by investing it in the Internet. He called it by some stupid name like "a Gigalapse."
I've remembered that bet for quite a few years, and whenever I hear a big loss, I always see if it comes up to a billion. I've seen a few companies lose hundreds of millions, but nobody's come close to a billion that I know of. But surely it will happen someday, sooner than we think. For all we know, Microsoft or Google might have lost a billion in some bad internet investment and buried it somewhere in their P&L where nobody is looking.
Biggest Internet loser ever? Easy. (Score:5, Insightful)
Time Warner. They bought AOL and never looked forward since.
Re:Biggest Internet loser ever? Easy. (Score:2)
Re:Biggest Internet loser ever? Easy. (Score:2)
Re:Biggest Internet loser ever? Easy. (Score:2)
Re:Biggest Internet loser ever? Easy. (Score:2)
Re:Biggest Internet loser ever? Easy. (Score:3, Informative)
Also, the grandparent post is technically inaccurate -- AOL bought Time Warner, not the other way around.
Re:Biggest Internet loser ever? Easy. (Score:2)
This would mean AOL/TW is ineligible for the Gigalapse award. AOL lost money acquiring old tech (TV, publishing), where I'm looking for a money lost on an internet investment.
You see, it isn't easy getting a clear winner on this bet.
Re:Biggest Internet loser ever? Easy. (Score:2)
Time Warner. They bought AOL and never looked forward since.
Yep. This is the same Time Warner that bought Atari, then got upset when the people working there claimed the 2600 wouldn't last forever and that they were already working on it successor. Time Warner is a rich company with no knowledge of how technology works. They just buy out other companies that seem like fashionable cash cows at the time.
Re: (Score:2)
Re:This stuff is small change. (Score:2, Informative)
For those who never heard of it or don't recall, Metricom was blanketing entire cities with their "Ricochet" wireless Internet access coverage. Yes! In 1999 and 2000! I was a subscriber, and got some real use out of the thing, though the service was expensive ($70/month) and slow (the claimed 128kbps rarely materialized). (But then, back then, most people were using dialup anyway.)
I
Re:This stuff is small change. (Score:3, Interesting)
I had Metricom from 1996-1999. It was only 28.8 at first, but in 1996 dialup was 28.8. At $40 a month it was less than the cost of dialup plus a 2nd phone line, so the mobile part was a bonus. It was unmetered and always on. In 1997 I could sit outside Starbucks and get work done, send/receive ema
Re:This stuff is small change. (Score:2)
Talks about the gigalapse and CmdrTaco! Bunch of seemingly random stuff tied together pretty well
Telco's (Score:2)
BTW: I know stocks prices are not the same as cash but accountants and bankers think a bit differently.
Re:This stuff is small change. (Score:3, Informative)
AT&T & friends spent 1.4 billion on Net2Phone and then [com.com]sold it for $28 million [newtelephony.com]
They forgot Value America (Score:4, Informative)
Value America was a textbook case of the dot bomb. Literally... the book "dot.bomb: My Days and Nights at an Internet Goliath" describes the rise and fall of Value America.
iloomy butt! (Score:3, Informative)
Re:iloomy butt! (Score:2)
And yet somehow the internet fridge [google.com] survived. "Evolving markets", go figure!
Online Malls (Score:2)
Ok, maybe I'm the only one.
Re:Online Malls (Score:3, Funny)
FuckedCompany? (Score:5, Interesting)
Re:FuckedCompany? (Score:2)
Re:FuckedCompany? (Score:2)
Re:FuckedCompany? (Score:2)
Re:FuckedCompany? (Score:3, Interesting)
I have the book, you can have it here: http://www.amazon.com/gp/product/0743228626/103-53 65480-9092665?v=glance&n=283155 [amazon.com]
It is excellent, scary, and amusing all at the same time. I can't tell you how its just filled with page after page about how X company got Y*100 million in VC, and in Z days/years they were bust. One company had over $300mil in VC money, and Philip Ka
Sprockets.com (Score:5, Interesting)
As best I could tell, Sprockets was completely fake. The goal was to build a new-media friendly collaboration tool. Emphasis was on appearance and real development work was outsourced to Israeli programmers who could barely keep up with...well they just sucked. I never saw a deliverable and never had any responsibilities.
We had four in-house developers, fresh college kids who mostly goofed around and laughed at their non-responsibilities. When I showed up to work at 11am, the infrastructure team bluntly offered me a free cellphone. They also threw stock at me like toilet paper.
I bailed on Sprockets to take a real development job at double salary, but about a year later I got a letter in the mail saying Sprockets was defunct and I could come to the office to take whatever I wanted. Fait accompli...venture capital=profit. I can't believe they got away with it, but my feeling is this was pre-planned from the start and they broke no actual laws. They knew what they were doing.
Call it VC raiding. Anybody who wasted venture capital should probably be jealous (and my future employer did exactly that.)
Re:Sprockets.com (Score:3, Funny)
How is Mr Spacely and what's George up to these days...
Fraud (Score:2)
If they knew from the start what they were doing (taking investors' money and pissing it away), then the law they broke is that against fraud - "A deception deliberately practiced in order to secure unfair or unlawful gain". Even if their goal was not to embezzle millions but only to enjoy the easy life for a while and put "Internet start up" on their CV's, it was still fraud if they did it inten
Cuecat success despite best attempts (Score:5, Interesting)
It should be noted that this minor "cottage industry" success appeared despite efforts to the contrary [slashdot.org] by Mr. Philyaw (or whatever name he calls himself now or the future). Referring to the device as "butchered" is telling.
As an aside, it's interesting that he now operates a "patent holding company" and changed his name. Even more so is his choice of name. The guy's a class act all the way.
Re:Cuecat success despite best attempts (Score:2)
match made in . . . (Score:2, Funny)
Lest we forget (Score:2)
etoys.com
Disclaimer: I am the logistics - and database agent of etoy.
i have a pets.com sock puppet (Score:2)
i have a business plan to make money off of it
1. sit on pets.com sock puppet
2. ?????
3. profit
where ?????=wait for the years to build, the nostalgia to set in, and its value to climb, ready for sale on ebay
it's a sure thing, no way my plan can lose money
Where are they now? (Score:5, Informative)
cyberrebate.com - "Distributions to creditors (including rebate claimants) are being mailed beginning April 22, 2005. Creditors will receive $.08802 per dollar of allowed claims" The check is in the mail!!
pets.com - Bounces you to petsmart.com. Wonder how much PetsMart had to pay for the DNS rights? I'm guessing 2 barks and a milkbone.
webvan.com - DNS error. Legend has it this company actually burned through $1 billion.
peapod.com - Still alive in ChiTown, Milwaukee, and SE Wisco. Go peapod!!
carsdirect.com - Still alive but appears to be simply a car dealer referral service, not the once vaunted "direct seller". Never hit that sweet IPO - it was withdrawn as the bubble burst.
imotors.com - They built small factories to refurbish and re-warranty used cars which were delivered to customers. The factories are gone - now they're just an information broker apparently.
flooz.com - WTF? Random placeholder page?
boo.com - A splash page lives on and claims a new site is launching in 2006. Register your email address to receive updates. "The boo is back! Shh..." Oh joy!
kozmo.com - DNS error.
priceline.com - Still around of course.
agillion.com - Essentially blank page save the link to blogger.com
sprockets.com - Now a musical composing, scoring, and production service.
cuecat.com - An online obituary. Are they hoping this gets search-engine-indexed into posterity?
i2 - Supply chain software. Still here, but stock price is at $17, down from the 5-year high of $643. Look out below!
eToys - Still around.
idealab - Famous incubator - carsdirect, petsmart.com, etoys, etc - still around.
eCompanies - Famous incubator - still around.
Re:Where are they now? (Score:2)
Re:Where are they now? (Score:2)
CNET's list (Score:4, Informative)
1. Webvan
2. Pets.com
3. Kozmo.com
4. Flooz.com
5. eToys.com
6. Boo.com
7. MVP.com
8. Go.com
9. Kibu.com
10. GovWorks.com
Does anybody here remember AllAdvantage? (Score:3, Interesting)
Yet another item for the list... (Score:4, Insightful)
We Europeans fucked up too! (Score:3, Interesting)
They final month before the office was vacated saw the guys smoking weed in front of the webcam, my boss doing coke in the toilets and our isp bill at enormous rates as the guys spent the whole day downloading stuff from Napster and fighting with the sysadmin who was trying to save a bankrupt company from losing even more money.
Re:Wacky names... (Score:2, Informative)
what the fuck is an 'ipod' what a silly name it'll never sell