06 Oct 2008 |
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These 10 Epic failures are oustanding... 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
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. 2. HavenWorks.com
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
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
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
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
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 or when there is a better option of a rewards credit card! What were they thinking? More info: Here, here and here. 7. eToys.com
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. 8. Kibu.com
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
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
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. FeedbackWhat's your take on these 10 Epic failures? Please leave a comment below. Comments (58)
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How the heck can they spend a Billion and get no result?
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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!
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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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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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the difference between Flooz and PayPal
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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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MySpace grossed over $850 million in revenue this year and is projected to break over $1 billion next fiscal year.
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@chai g:
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Actually, PayPal can be used anywhere that accepts major credit cards and 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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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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Selling pet supplies on the web is an "unsustainable business model"???? Then why are petco.com and petsmart.com so successful?
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Funny enough people do use Live search.
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okay...how is myspace bad????I enjoy the way I can customize it, and the fact that I can show off my musical preference by embedding the music I would usually listen to.... explain what is wrong with full customization besides the fact that some go over board with stuff that make it look horrible..... Personally, I like my myspace profile more than I like my Facebook
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What went wrong with MySpace is this:
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Can you add also www.italia.it, now death.
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This post is so good, it should be turned into a whole website chronicling the dotcom bust, and also subsequent busts and misguided (i.e. crazy) web manias. |
