Dot-com Boom's Biggest Duds, From Flooz to iSmell

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."

annoying link

[Bairdsy]

Is there a way to get to the actual article without the extremely annoying shenanigans they insist on putting me through?

I'm sorry, but...

[VValdo]

any list of tech duds that doesn't include the venerable iOpener [linux-hacker.net] is.. well, incomplete.

W

Don't forget ...

[MrNougat]

Pets.com [wikipedia.org], and Webvan [wikipedia.org].

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.

They forgot Value America

[LoadStar]

They also forgot Value America. Similar to the CyberRebate.com which was mentioned in the article, except even less thought through than that... they pretty much gave stuff away for practically nothing. I can't even describe how much cheap stuff I got from them at half price or less.

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!

[macdaddy357]

The iloo was a joke that became an urban legend. There was never actually a plan to make such a thing.

Re:Wacky names...

[legallyillegal]

Heh, I half expected "Wii" to be on the list, alongside all the other unmarketable names like iSmell and Flooz.

what the fuck is an 'ipod' what a silly name it'll never sell

Re:This stuff is small change.

[5pp000]

Anyone remember Metricom? Paul Allen reportedly lost some $600M on that. That's more than halfway to your $1B target.

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.)

If they had moved more carefully, instead of madly rolling out a service for which demand had not yet developed, they might be sitting very pretty indeed by this point. Oh well, hindsight...

Thriving in the UK

[ndg123]

Online grocery ordering and delivery is doing quite well in the UK still. Though its generally provided by the existing companies off the back of their own stores, rather than new enterprises (maybe except for Waitrose, who are closely linked with a separate delivery company).

Re:Biggest Internet loser ever? Easy.

[David Jao]

AOL Time Warner lost 54 billion dollars [thestreet.com] as a direct result of the merger. Call it non-cash if you want, but the shareholders (especially big institutional investors, such as Janus fund) lost real money.

Also, the grandparent post is technically inaccurate -- AOL bought Time Warner, not the other way around.

Still kicking in Australia

[Joel from Sydney]

Both of Australia's major [colesonline.com.au] supermarket [woolworths.com.au] chains offer online shopping and home delivery. I've been doing this for the past year or so, and it's pretty impressive. I've got a standard cart set up with my usual groceries, so when I need to do a shop I just make any necessary modifications to the standard order, and specify a delivery time. Easy as pie!

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?

Where are they now?

[SuperGus]

Let's cast a nostalgic browser into the ether and see what some once-fabled URLs return. I've also included results for some of the lesser-known companies mentioned in other slashdotters' postings and, of course, companies from TFA.

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:Nostalgia, Anyone?

[foreverdisillusioned]

Here in the real world, online companies have to pay rent (or construction + property tax) and utilities - they don't operate out of the back of a pickup truck. (And those premises require upkeep and maintenance too.) They might pay 1/10 the rent of a B&M business, because they don't care if they're in the crappy part of town.

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 .com stores usually lack--e.g. sales or security (yes, there will be *some* security at the .com warehouse, but the lack of public access and lack of employees' direct access to cash makes this much easier--and therefore cheaper.)

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 .coms a TON of money. Commericially-zoned property is much more expensive. This means magnified rents or magnified purchase costs and property taxes. Much more money will have to be spend on interior design. The utilities bill will generally be much higher. Insurance will be MUCH higher. You must have cashiers and customer service and security around *at all times*, even when there aren't any customers. Sales people, if you have any, will steal your profit in the form of a commission (or if they're commission-less, they're either have a rather high hourly wage or they'll be very apathetic and ineffective about doing their job.) You have to pay for shopping carts and the land for the parking lot and cameras to watch over the parking lot (at least if you're a major chain) and people to WATCH the cameras that look over the parking lot. You have to hire guys to paint your building nice and pretty (.com warehouse has no problem looking rusted and shitty.) You hire guys to come in and replace your lights when they blow, service your cash registers when they go on the fritz, mop the floors when they get dirty. Yes, to an extent this is all done at the warehouse as well, but they expend maybe 1/100 of the effort as the retail store. They don't care if the floor is dirty as hell, so long as they aren't violating any OSHA regs. They don't care if they have bare incandescent bulbs hanging 5' above everyone's heads (vs. those huge flourescent bulbs hanging 20' or 30' above your head at Wal-Mart. I bet they're just *slightly* more expensive to change.) If the air conditioner in the warehouse breaks down,

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darn you

[tacokill]

Man, I was gonna laugh at this but my pedantic side got the best of me and I just can't do it.

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...

CNET's list

[Jugalator]

I think I personally like CNET's list [cnet.com] more:

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

Re:This stuff is small change.

[dukerobillard]

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.

AT&T & friends spent 1.4 billion on Net2Phone and then [com.com]sold it for $28 million [newtelephony.com]

Article Text

[Anonymous Coward]

The Best of the Worst
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