Pets.com gives a blast from the dot bomb past
As Twitter debuts on the New York Stock Exchange, Pets.com and its sock puppet mascot remember the anniversary of one of the biggest busts of the dot-com bubble.
If you type Pets.com into your browser today, you get redirected to a site for the retailer Pet Smart. But, 15 years ago, you would've been visiting one of the most popular Web sites to hit the Internet.
Pets.com is a case example of the classic dot bomb story. In its two short years, it went from tiny startup in August 1998 to a publicly traded company in February 2000 to collapsed in November 2000.
In its heyday, Pets.com -- and its talking sock puppet mascot -- were ubiquitous; the spokesdog was in a multimillion-dollar Super Bowl commercial, on a balloon in the Macy's Thanksgiving Day Parade, and interviewed on TV shows like "Good Morning America." The company was draped in money from investors like Amazon and venture capital firms.
But, alas, Pets.com had an Achilles' heel. It wasn't profitable.
The online pet-supply store was never able to give pet owners a compelling reason to buy pet goods via the Internet. After ordering kitty litter, customers had to wait days to actually get it. Moreover, because the company had to undercharge for shipping costs to attract customers, it actually lost money on most of the items it sold.
Yet, that didn't stop Pets.com from going public. Just one and a half years after launching, Pets.com raised $82.5 million in an initial public offering. After months of dismal trading on Wall Street, Pets.com moved some of its operations from pricey San Francisco to the cheaper Midwest, laid off hundreds of employees, ratcheted down operations, and then completely petered out in nine short months after its IPO.
It was 13 years ago Thursday that Pets.com definitively threw in the towel announcing that it was surrendering to the inevitable.
Coincidentally, Thursday is the same day that Twitter historically debuted on the New York Stock Exchange. Amid much fanfare, the social network kicked off trading with shares priced at $26. By the end of the day.
While Twitter has clearly studied the playbook to avoid mistakes of other tech companies that have gone public before it, the social network currently has that same Achilles' heel as Pets.com. So, the story of the failed e-tailer could serve as cautionary reminder of the ghost of dot-coms past.