Pets.com
From Free net encyclopedia
Pets.com is a former dot-com enterprise that went bankrupt in 2000. Today it is considered a leading icon of the dot com bust of the early 2000s.
History
The business aimed to sell pet accessories and supplies over the World Wide Web, analogous to Webvan's attempt to sell groceries, and garden.com's try at selling garden supplies online. Pets.com launched in November of 1998; it went from IPO on a major stock exchange, the Nasdaq, to liquidation in 9 months' time.
After its start by Greg McLemore, the site and domain was purchased in early 1999 by leading venture capital firm Hummer Winblad and executive Julie Wainwright. They and several other dot coms, such as Petstore.com, sought to corner the market on pet supplies by selling exclusively over the internet. The company attracted an investment from Amazon.com and would eventually buy out competitor Petstore.com. The company subscribed to the dot-com philosophy that making a brand name known was as, or more, important than profitability. The company employed a myriad of medias (TV, print, radio, online in-house magazine) and even hired airplanes to drag banners with the Pets.com name around major cities. The company succeeded wildly in making its mascot, the Pets.com sock puppet, well known by the public; however, it was generally believed to be the icon of the dot-com business of leading offline retailer PETsMART (reference needed). The Pets.com site design was extremely well received, garnering them several awards. At its peak, their traffic was estimated at over 1 million hits per month largely driven by unbelievable promotional offers such as free shipping and 2 for 1 sales [[1]] [[2]].
Despite their incredible spending, gross margins from the sale of pet products through the site never materialized - their strategy had been based around conquering the market on pet supplies sold at discount, without adequate research on how many pet owners would use the service at regular prices. Pets.com management and eager venture capitalists maintained that their spending to build a brand-name overnight would create the necessary profit. In January 2000, the company spent more than $2 million on a Super Bowl ad to further expand their brand name and create more interest in their IPO. Pets.com made its initial public offering in February 2000. Its former Nasdaq stock symbol was IPET. At its peak, the company had 320 employees.
Over the course of the year 2000, the $175 million that Pets.com raised from venture capitalists and the public ran out and it was unsuccessful in raising further capital. They announced they were closing their doors on the afternoon of November 6, 2000. Pets.com stock had fallen from over $11 per share in February 2000 to $0.19 the day of its liquidation announcement. Despite the company's failure, the management of the company paid itself well for their results including $235,000 in severance on top of a $225,000 "retention payment" [[3]] to CEO Julie Wainwright to stay two months to oversee the closure.
What little assets they had were purchased by others including brick and mortar player PETsMART (the domain name pets.com redirects to PETsMART's website) and inventory liquidators.
The Pets.com sock puppet
Image:Pets-com-sock-puppet.jpg
While Pets.com's success at selling pet supplies at its website was dubious at best, the company did have one massive marketing success: its advertising icon, the unnamed Pets.com dog.
The puppet, performed by Michael Ian Black, was a simple sock puppet with button eyes, flailing arms, a stick microphone emblazoned with 'pets.com', and a Timex watch around its neck. Millions of dollars were spent on commercials featuring this dog from its introduction in August, 1999 into 2000, with a notable appearance of the Pets.com dog during a commercial in Super Bowl XXXIV in January 2000.
As the puppet's notoriety grew through 1999 and 2000, it gained almost cult status and widespread popularity. The puppet made an appearance on ABC's Good Morning America, Nightline, Live with Regis and Kathie Lee, and even had a balloon made in its image for the 1999 Macy's Thanksgiving Day Parade.
In addition to the media appearances the Pets.com puppet made, merchandising was also done for the company including clothing, other trinkets, and a retail version of the sock puppet that delivered five of the puppet's famous lines (shown above).
Critics argued that the attention given to the puppet was simply advertising overexposure and not true popularity. They pointed out that the appearances by the puppet on Good Morning America and Nightline happened soon after Disney, ABC's parent company, bought a stake in Pets.com.
As Pets.com's financial status began to become desperate, the company attempted a defamation lawsuit against the writer/comedian Robert Smigel—specifically, his character, Triumph, the Insult Comic Dog, which frequently appeared on Late Night with Conan O'Brien beginning in 1998. During a few of Triumph's routines, Triumph claimed that the Pets.com puppet had "stolen his routine," among other things; thus, the defamation suit[4]. The lawsuit was not enough to save the company. After Pets.com bankruptcy, the future of the Pets.com puppet was uncertain.
During the 2001 Super Bowl, E*TRADE ran a parody of the famous Crying Indian announcement in which a chimpanzee walks through a ruined dot-com landscape. At the end the chimp encounters a discarded Pets.com puppet and weeps.
After the company folded, Hakan and Associates purchased the rights to the puppet. In 2002 Hakan licensed it to an USA automotive loan company called 1-800-BAR-NONE, a mortgage and refinancing firm which took advantage of the Federal Reserve's drop in interest rates in the wake of the dot-com bust (of which Pets.com was a part). The puppet's new slogan: "Everybody deserves a second chance."
