Oct 06 2008

10 Epic Website Failures

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Written by David Towers   
Monday, 06 October 2008

These outstanding web failures did not require a $700 billion government bail out but they did manage to burn a hole in someone's pocket!

1. Myspace

Myspace terrible website

The idea: Social networking site aimed at 13 year olds.

Spent: Rupert Murdoch paid $327 million for MySpace in July 2005 (more info).

Highlights: More than 100 million users. Users can add friends, customise their profiles, add comments to profile pages and embed music. Myspace was Voted #1 worst website by PCWorld.

What went wrong? Myspace let users personalise their pages making the majority of profiles look horrific and illegible.

More info: here and here.

2. HavenWorks.com

HavenWorks website failure

The idea: News portal

Spent: $120 per year for past 9 years (Hosting cost!)

Highlights: Homepage is over 800k! Over 3600 diggs for HavenWorks being the worst designed website on the net. Received over 70,000 visitors in March (according to Compete).

What went wrong? What didn't? How this site has been online over 9 years defeats imagination. HavenWorks looks more like a pack of sweets than a news website.

More info: Here, here and here.

3. Pets.com

Pets.com website failure

The idea: Sell pet accessories and supplies direct to consumers.

Spent: $82.5 million in 2 years.

Highlights: Most trafficked online pet store at the time. Created a famous sock puppet which appeared on TV ads (watch a medley of Pets.com TV ads here). Ran a Super Bowl ad which cost $1.2 million.

What went wrong? Unsustainable business model. Who wants to wait 2 days for your cat litter to arrive when your cat has already pooped all over the kitchen floor.

More info: Here, here, here and here.

4. Webvan

Webvan failure

The idea: Online grocer, sold and delivered groceries within the US.

Spent: $1billion in 18 months.

Highlights: Went from a $1.2bn company with 4,500 employees to bust in less than two years. Share price went from $30 to 6 cents in a few months.

What went wrong? They built an infrastructure that cost over a billion dollars before they had made serious profit. The directors didn't understand the importance of cash flow!

More about WebVan.com here, here and here.

5. Kozmo.com

Kozmo website failure

The idea: Free one-hour delivery of any items above $10 (like DVD rentals or Starbucks coffee) within their service area.

Spent: Over $280 million in 3 years.

Highlights: Amazon invested $60m in Kozmo. Expanded to 7 US cities. Over 1100 employees. Advertised on TV. Documentary film made which portrays the fate of the company (e-Dreams, 2001).

What went wrong? How did they expect to cover the huge start up costs delivering DVD rentals and a pack of gum for free?

More info: Here, here and here.

6. Flooz.com

Flooz failure

The idea: Create an online currency. Can you lend me a Flooz?

Spent: $50 million in 3 years.

Highlights: Promoted by comic actress Whoopi Goldberg. Flooz lasted two and a half years. Russian mafia used Flooz for money laundering!

What went wrong? Who wants to use pay for products using an online currency when they could just use a credit card! What were they thinking?

More info: Here, here and here.

7. eToys.com

eToys website failure

The idea: Sell toys online.

Spent: $166 million in 4 years.

Highlights: Stock went from a high of $84 per share in October 1999 to a low of just 9 cents per share in February 2001.

What went wrong? Classic boom-to-bust, spending outweighed the company's income.

More info: Here and here.

8. Kibu.com

Kibu website failure

The idea: Online community for teenage girls: "fashion, music, and boys"

Spent: $22 million in less than a year.

Highlights: Backed by a number of big Silicon Valley names including Jim Clark. Ran out of money and closed the site 46 days after the launch party!

What went wrong? A spectacular failure. Boom to bust to under a year. Some say Kibu.com was a victim of the fall in the financial markets as a result of the dot com bust.

More info: Here, here and here.

9. Boo.com

Boo.com epic failure

The idea: Sell expensive branded fashion apparel.

Spent: $135 million in 6 months.

Highlights: When Boo.com went bust, they owed over $21million to creditors. Boo.com's software and technology purchased at $70 million, were sold off for $250k.

What went wrong? They built a site using JavaScript and Flash in the days of 56k modems so users had to wait ages to load the site, they also employed 400 people when they only needed 30.

More info: Here, here and here.

10. Microsoft live search

Live search failure

The idea: Create a search service that people will actually use.

Spent: Several billion dollars!

Highlights: Multiple attempts to buy out Yahoo. Launched two programs to entice users to use Live: Cashback and SearchPerks. Cashback was launched in May 2008 and didn't have a significant effect on traffic numbers. SearchPerks was launched on the 1st October and probably won't do much either.

What went wrong? Live's search results are so poor, users can't even be bribed to use it! Live search has less than 10% of the search market.

More info: Here, here and here.

Feedback

What's your take on these 10 Epic failures? Please leave a comment below.

26 Comments
rick_of_racy
October 06, 2008
Votes: +1

This is a great list. I remember all of these. The windows live search still sucks. I wanted Kozmo to survive so damn bad. Never got out to the boonies. I don't think a delivery business like that is really *able* to be profitable.

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Philip Norton
October 06, 2008
Votes: +13

Live have a search engine? I thought it was a random website generator! smilies/wink.gif

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Mike K
October 06, 2008
Votes: +1

Where's cuil.com, they should be in the list, too!

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Westchester Computer Services
October 07, 2008
Votes: +1

What about cuil.com?

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Marc
October 07, 2008
Votes: -7

I use live search on my mobile phone on a daily basis, and I can tell you it is a great app

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g1smd
October 07, 2008
Votes: +2

How the heck can they spend a Billion and get no result?

Beggars belief... where did the money go?

Someone should have reined it in after the first 20 or 30 million.



And at the other end of the scale, some businesses won't even pony up 10K to give themselves a half-decent start on the web...


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MattK
October 08, 2008
Votes: +1

Amazing list, isn't it? I remember when Whoopi Goldberg was shilling for Flooz and couldn't help that even the comical Goldberg found the entire concept to be funny.

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Boris
October 08, 2008
Votes: +0

5% of the market share is actually a damn good amount of market share, and they are able to stay profitable. Even ask.com which has less than %4 market share is STILL profitable, so don't knock the number three guys!

And also, I vaguely remember Flooz, but don't think I understand...why wouldn't someone just use real moneY?

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Matthew
October 10, 2008
Votes: -4

thank u r information

it very useful

u r blog Is very nice
smilies/grin.gif smilies/cheesy.gif

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Internet Marketing Joy
October 10, 2008
Votes: +0

This is a very interesting read..I've learned something new today..anyways thanks a lot for sharing it with us!

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Ian
October 13, 2008
Votes: +3

On the topic of Windows Live Messenger: I think Google's so dominant that theres no point there being any other search engines.

It'll take a really massive amount of creativity of exceed Googles market share.

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Roger
October 13, 2008
Votes: +2

Wait.. Flooz.. PayPal.. Difference?

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Hosting Reviews
October 13, 2008
Votes: +1

Amazing. So much money simply being poured down the drain. What a ridiculous waste. Incidentally my space is in fact the worst website ever.

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John
October 14, 2008
Votes: +1

My company hired eToys VP of customer service for the same position. She succeeded in "cutting overheard" by simply wiping out the budgets of Development and QA, cutting salaries, and replacing them with temps and contracts when they quit... to acclaim of course. She now has the same position at OG&E, so I expect to lose my power any day.

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Doug Rosbury
October 14, 2008
Votes: +1

To live according to a fantasy means that you have no foundation in reality. No foundation,No future.
No reality, no substance, No foundation for analysis.
No real thought. Such an activity amounts to a
nothingness.---Doug Rosbury

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Promeus
October 14, 2008
Votes: +1

The creator of Myspace is disgustingly rich now and you call it a failure? What exactly is your idea of a success? Is it gross income or the positive impact the site makes on the internet as a whole? Yeah, Myspace may have no redeeming value, but I wouldn't call it a failure just because of an opinion.

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chai g
October 14, 2008
Votes: +0

the difference between Flooz and PayPal

Flooz = you converted currency (say U.S. dollars) into "Flooz" or money which could only be spent at certain online retailers.

PayPal= allows you transfer funds from one person to another (assuming both have PayPal accounts) or to purchase products from any online retailer that accepts PayPal.

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miragana
October 14, 2008
Votes: -1

Good day!
It is very informative and has a very good quality in it.
I like it...

Self Improvement
Modern Rifle
Happy Halloween

Thank you very much for your time. smilies/grin.gif

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Beau
October 14, 2008
Votes: +0

Flooz is always misunderstood in these types of articles. It was a universal gift certificate, not a way for YOU to spend money. It was to give as a gift, and allow the recipient to shop wherever they wanted. I gave many people Flooz, it was quite handy.

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JoblessPunk
October 14, 2008
Votes: +0

haha, I hella remember the Pets.com sock puppet

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Brandon
October 14, 2008
Votes: +0

MySpace grossed over $850 million in revenue this year and is projected to break over $1 billion next fiscal year.

The much cleaner, better looking Facebook on the other hand is still only predicting $300 million for the next fiscal year and is "valued" at $12 billion.

I think Rupert Murdoch was laughing all the way to the bank. He has made his money back many times over and got a steal of a deal. The real sucker is the one who pays full price for Facebook.

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Dpwn
October 15, 2008
Votes: +1

@chai g:
Flooz...money which could only be spent at certain online retailers.

PayPal...purchase products from any online retailer that accepts PayPal.

Huh? There IS no difference, other than the fact that PayPal took off and Flooz didn't. Or are you saying that with Flooz you had to convert the money PRIOR to the transaction? Now that it's defunct, we may never know...

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Blake
October 15, 2008
Votes: +0

Actually, PayPal can be used anywhere that accepts major credit cards. PayPal Debit. It's a Visa attached to your PayPal. Also, PayPal can be linked directly to a credit card or bank account also. With Flooz, you had to buy credits or got them as promotional items. Just look it up on Wikipedia. You'll see the differences.

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jamie
October 15, 2008
Votes: +0

How is Myspace a failure? Yes, it's horribly ugly, and yes, it's full of immature kids, but it's a moneymaking machine for a lot of people. Ask its creator - I'm pretty sure he'd call it a success, at least as far as the business aspect goes. And since this post is centered around the business aspect of these websites...

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Reuben Pressman
October 15, 2008
Votes: +0

Very very nice list!

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click170
October 15, 2008
Votes: +0

Whats this my space thing?

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