Pets.com - $300 million failure

Sockpuppet from pets.com

Sockpuppet from pets.com

One of the biggest failures of the .dot com bubble of the early 2000s was the company Pets.com, set up to sell pet supplies through the Internet.

The company started business in February 1999 and spent millions on advertising, including Super Bowl advertisements and the invention of a sock puppet, which quickly gained cult status, as a spokesperson – check out the picture on the right.

During it’s two years in existence the company managed to hire 320 employees, go public on the NASDAQ stock exchange, invest millions in warehouses and infrastructure and spend even more millions in advertising.

Unfortunately the American public was not ready to order their pets’ plastic toys and tiny beds through the Internet, and Pets.com only saw earnings of $619.000 it’s first fiscal year, with the advertising cost alone close to $12 million. If the spending wasn’t enough to drown the company, they also lost money on every one of the few sales they had, for example by offering free shipping of heavy food bags and dog houses.

300 million dollars had been invested into the company, but after the dotcom bubble burst pets.com did not see another dollar, stock fell from $11 to $0.19 and the high expenditure soon forced Pets.com to close down as one of the most spectacular commercial failures of the dotcom bubble.

What’s your biggest failure? Do you have any good stories about failures, accidents or embarrasing events? The more embarrasing, the better. E-mail your story to mail@hotfail.com and we’ll assume we have your permission to put it on the web (anonymously of course!)

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