Boo.com

Last updated

Boo.com
Type Dutch NV
(Disestablished in 2000)
Industry retail
Founded17 March 1999;24 years ago (1999-03-17) [1]
Defunct2000 (2000)
Headquarters London, England
Key people
Ernst Malmsten
Kajsa Leander
Patrik Hedelin
Products clothing, cosmetics
Website Boo.com (Domain now owned by Hostelworld)

Boo.com was a short-lived British eCommerce business, founded in 1998 by Swedes Ernst Malmsten, Kajsa Leander and Patrik Hedelin, who were regarded as sophisticated Internet entrepreneurs in Europe by the investors because they had created an online bookstore named Bokus.com, the third largest book e-retailer (in 1997), before founding boo.com. [2] [3]

Contents

After several highly publicized delays, Boo.com launched in the autumn of 1999 selling branded fashion apparel over the Internet. The company spent $135 million of venture capital in just 18 months, [4] and it was placed into receivership on 18 May 2000 and liquidated.

In June 2008, CNET hailed Boo.com as one of the greatest dot-com busts in history. [5]

Ernst Malmsten wrote about the experience in a book called Boo Hoo: A dot.com Story from Concept to Catastrophe, published in 2001. [4]

Marketing plan

Company vision

Boo.com was intended to become the largest online sports e-retailer in the world, planning to set up stores in both Europe and America simultaneously. [2]

Brand name

The brand name was initially suggested as Bo.com, which was inspired by the actress Bo Derek. The final domain name, Boo.com, was bought for $2500 from a dealer as the domain Bo.com was already in use. [6]

Strategy

The target customers of Boo.com were young, wealthy and fashionable people between 18 and 24 years old, who were expected to be attracted by sports and fashion brands offered by Boo.com. [2] Boo.com created a virtual shopping assistant, Miss Boo, to assist customers with tips given at each step. Boo.com also developed technology that allowed online customers to put their chosen products onto 3D models and then inspect the result. [7]

Headquarters and relaunch

The company had its headquarters along Carnaby Street in London. [3] The company initially had 40 employees. [8] In October 1999, it had a total of eight offices and 400 employees [3] in Amsterdam, Munich, New York City, Paris, and Stockholm. [8] It relaunched in the autumn of 2000 with Kate Buggeln, an ex-Bloomingdale's salesperson and Internet consultant, appointed as president. She told Women's Wear Daily that they were working to "expand beyond the portal business model into Boo products and Boo licensing." [9]

Reasons for failure

Timing

Although there were several months of delays prior to launch and problems with the user experience when boo.com first launched, these had been largely fixed by the time the company entered receivership. Sales had grown rapidly and were around $500,000 for the fortnight prior to the site being shut down.

The fundamental problem was that the company was following an extremely aggressive growth plan, launching simultaneously in multiple European countries. This plan was founded on the assumption of the ready availability of venture capital money to see the company through the first few years of trading until sales caught up with operating expenses. Such capital ceased to be available for all practical purposes in the second quarter of 2000 following dramatic falls in the NASDAQ presaging the "dot crash" following the dot-com bubble. Boo was one of numerous similar dot-com company failures over the subsequent two years.

One Boo.com manager acknowledges that the company's failure was that global marketing and advertising costs too much, and that managers and technology invest too little. It spent $135 million of its investment in 2 years. [10]

Problems with users experience

The Boo.com Homepage as it appeared in May 2000. Boo Homepage.jpg
The Boo.com Homepage as it appeared in May 2000.

The boo.com website was widely criticized as poorly designed for its target audience, going against many usability conventions. [11] The site relied heavily on JavaScript and Flash technology to display pseudo-3D views of wares as well as Miss Boo, a sales-assistant-style avatar. The first publicly released version of the site included many large pages; the home page, for example, was several hundred kilobytes which meant that many users had to wait minutes for the site to load, as broadband technologies were not widely available at the time. The site's front page contained the warning, "this site is designed for 56K modems and above".

The complicated design required the site to be displayed in a fixed-size window, which limited the space available to display product information to the customer. Navigation techniques changed as the customer moved around the site.

The site's interface was complex and included a hierarchical system that required the user to answer four or five different questions before sometimes revealing that there were no products in stock in a particular sub-section. The same basic questions then had to be answered again until results were found.

Excessive expenditure on marketing

Within 18 months, $135 million was spent on marketing by Boo.com. [12] Boo.com spent $25 million on advertising and public relations marketing before it had even opened to sell products.

To attract consumers, the site developed a new Internet virtual technology with which consumers could drag their intended clothes onto a virtual 3D body model, and then view it from whatever angles and distance they wanted. The investment in this technology cost Boo.com over $6 million to develop and $0.5 million every month to maintain.

Burn rate

Boo.com spent £125 million in just six months. [13] Boo.com's sales did not match expectations, due partly to a higher-than-expected rate of product returns (a service that was offered for free, but charged for by their logistics supplier Deutsche Post). Poor management and a lack of communication between departments resulted in rapid growth in costs. The effectiveness of an expensive ad campaign was limited since the website was not ready in time, resulting in curious visitors being greeted with a holding page.

Staff and contractors were recruited in large numbers, with a lack of direction and executive decision about how many people were required, resulting in high payroll costs.

Aftermath

The biggest loser among boo.com's investors was Omnia, a fund backed by members of Lebanon's wealthy Hariri family, which put nearly £20 million into the company.

Creditors, most of whom were advertising agencies, were owed around £12 million. Over 400 staff and contractors were made redundant in London and around the world, and many had not been paid for several months.

In a widely circulated article, [14] former Interim CTO Tristan Louis broke down the problems that plagued the company, in one of the first post-mortems of a technology company posted online.

Fashionmall.com, which had been operating since 1994, bought the remains of Boo.com, which included brand, web address and advertising materials but did not include any physical assets, software or distribution channels. [13] The deal also included the Miss Boo character. Boo's main assets, its software and technology, were sold to Bright Station, a British company run by Internet entrepreneur Dan Wagner, for $250,000 and served as the basis for Venda Inc. [13] Wagner credited the technology he acquired as key to the success of Venda (and its eventual acquisition by NetSuite for US$50M in 2014).

Less than $2 million was earned by selling all Boo's remaining assets. [15]

Of the original global boo.com staff only one worked for both boo.com incarnations. Bill Burley of the original boo.com staff in New York City is a retail executive in buying and merchandise planning. Burley was hired by fashionmall as the Global Fashion Director of the new boo. He reported directly to Ms. Buggeln. [16]

In 2005 CNET called Boo.com the sixth greatest dot-com flop. [17]

Current state of the domain

In May 2007 Web Reservations International (WRI) turned boo.com into a travel site with reviews and listings. When the new site launched, it already had more than one million user reviews which had been collected from existing WRI travel sites. [18]

In October 2010, the new boo.com site announced that it was closing down with effect from 1 November 2010.

As of July 2020 boo.com redirects to hostelworld.com.

Related Research Articles

<span class="mw-page-title-main">Dot-com bubble</span> Tech stock speculative craze, c. 1997–2003

The dot-com bubble was a stock market bubble in the late 1990s. The period coincided with massive growth in Internet adoption, a proliferation of available venture capital, and the rapid growth of valuations in new dot-com startups.

Pets.com was a dot-com enterprise headquartered in San Francisco, U.S, that sold pet supplies to retail customers. The website was launched in November 1998 and was shut down in November 2000. A high-profile marketing campaign gave it a widely recognized public presence, including an appearance in the 1999 Macy's Thanksgiving Day Parade and an advertisement in the 2000 Super Bowl. Its popular sock puppet advertising mascot was interviewed by People magazine and appeared on Good Morning America.

Yahoo! Native is a native "Pay per click" Internet advertising service provided by Yahoo.

<span class="mw-page-title-main">Halsey Minor</span> American businessman

Halsey McLean Minor Sr. is a prominent American entrepreneur who gained fame for founding CNET in 1993 - the first technology content publisher aimed at consumers. He is also the founder or co-founder of various technology start-ups, including Live Planet, a virtual reality start-up, VideoCoin, and Vivid Labs.

Jamba is a German company that created and marketed ringtones for mobile phones. It operated under the name Jamster in China, Armenia, Georgia, Saudi Arabia, Iran, Oman, France, Kuwait, Turkey, Switzerland, Kazakhstan, Austria, Brazil, Israel, the United Arab Emirates, the United Kingdom, the United States, Sweden, Iraq, Poland and Malaysia.

<span class="mw-page-title-main">Tristan Louis</span>

Tristan Louis is a French-born American author, entrepreneur and internet activist.

<span class="mw-page-title-main">CDNow</span> Online shopping company

CDnow, Inc. was a dot-com company that operated an online shopping website selling compact discs and music-related products. In April 1998, during the dot-com bubble, the company was valued at over $1 billion. In July 2000, it was acquired by Bertelsmann Music Group for $117 million ; shortly thereafter Amazon was contracted to operate the website. At its peak, it employed over 750 people and had offices in Fort Washington, Pennsylvania, New York City, London, and Los Angeles.

Business.com is a digital media company and B2B web destination which offers various performance marketing advertising, including lead generation products on a pay per lead and pay per click basis, directory listings, and display advertising. The site covers business industry news and trends for growth companies and the B2B community to stay up-to-date, and hosted more than 15,000 pieces of content as of November 2014. Business.com operates as a subsidiary of the Purch Group since being acquired in 2016.

<span class="mw-page-title-main">VocalTec</span> Israeli telecom equipment provider

VocalTec Communications Inc. is an Israeli telecom equipment provider. The company was founded in 1985 by Alon Cohen and Lior Haramaty, who patented the first Voice over IP audio transceiver. VocalTec has supplied major customers such as Deutsche Telekom, Telecom Italia, and many others.

<span class="mw-page-title-main">Vignette Corporation</span>

Vignette Corporation was a company that offered a suite of content management, web portal, collaboration, document management, and records management software. Targeted at the enterprise market, Vignette offered products under the name StoryServer that allowed non-technical users to create, edit and track content through workflows and publish it on the web. It provided integration for enterprise resource planning, customer relationship management and legacy systems, supporting Java EE and Microsoft.NET. Vignette's integrated development environment and application programming interface offered an alternative to conventional Common Gateway Interface/vi/Perl web development. StoryServer was used on many large websites including those of CNET, UnitedHealth Group, The Walt Disney Company, Wachovia, Martha Stewart, Fox News, National Geographic Channel, Pharmacia & Upjohn, MetLife, BSkyB, the 2004 Summer Olympics, and NASA.

Comscore is an American-based global media measurement and analytics company providing marketing data and analytics to enterprises; media and advertising agencies; brand marketers and publishers.

Cyberian Outpost was an online vendor of discount computer hardware and software that operated the website outpost.com. After its IPO in 1998, it reached a peak market capitalization of $1 billion, but, after the bursting of the dot-com bubble, its stock price fell rapidly and the company was acquired by Fry's Electronics in 2001 for $21 million.

<span class="mw-page-title-main">NeoPlanet</span> Graphical web browser

NeoPlanet was a Trident-shell graphical web browser initially released in 1997 by New York–based Bigfoot International, Inc. and later maintained and developed by its subsidiary NeoPlanet, Inc. It was one of the first browsers to be fully skinnable.

<span class="mw-page-title-main">Content marketing</span> Form of marketing focused on creating content for a targeted audience online

Content marketing is a form of marketing focused on creating, publishing, and distributing content for a targeted audience online. It is often used by businesses in order to achieve the following goals: attract attention and generate leads, expand their customer base, generate or increase online sales, increase brand awareness or credibility, and engage an online community of users. Content marketing attracts new customers by creating and sharing valuable free content as well as helps companies create sustainable brand loyalty, provides valuable information to consumers, and creates a willingness to purchase products from the company in the future.

<span class="mw-page-title-main">Social media marketing</span> Promotion of products or services on social media

Social media marketing is the use of social media platforms and websites to promote a product or service. Although the terms e-marketing and digital marketing are still dominant in academia, social media marketing is becoming more popular for both practitioners and researchers. Most social media platforms have built-in data analytics tools, enabling companies to track the progress, success, and engagement of ad campaigns. Companies address a range of stakeholders through social media marketing, including current and potential customers, current and potential employees, journalists, bloggers, and the general public. On a strategic level, social media marketing includes the management of a marketing campaign, governance, setting the scope and the establishment of a firm's desired social media "culture" and "tone".

A dot-com party is a social and business networking party hosted by an Internet-related business, typically for promotional purposes or to celebrate a corporate event such as a product launch, venture funding round, or corporate acquisition.

Tradex Technologies Inc. was a developer of Java-based B2B e-commerce software. It primarily operated in the industries of financial services, telecommunications, plastics, and foodservice. It offered a platform for vertical trading hubs, another for large enterprises, and a third for the distributor channel segment. The software used JavaBeans technology.

Bigfoot International, Inc. was a New York City based holding company, which developed email communications, marketing automation and customer interaction software products during the dot-com era. Founded in 1997 by Lenny Barshack and James Hoffman, it grew out of Bigfoot.com, a free e-mail provider and Web directory. It eventually developed into a group of three subsidiaries: Bigfoot.com, Bigfoot Interactive, and Neoplanet, Inc. The company ended in 2000.

Epidemic Marketing was a short-lived dot-com company headquartered in Denver, Colorado that operated in the viral marketing sector. Before it closed its doors in June 2000, it employed approximately 60 people. Its website was located at www.epidemic.com.

The commercialization of the Internet encompasses the creation and management of online services principally for financial gain. It typically involves the increasing monetization of network services and consumer products mediated through the varied use of Internet technologies. Common forms of Internet commercialization include e-commerce, electronic money, and advanced marketing techniques including personalized and targeted advertising. The effects of the commercialization of the Internet are controversial, with benefits that simplify daily life and repercussions that challenge personal freedoms, including surveillance capitalism and data tracking. This began with the National Science Foundation funding supercomputing center and then universities being able to develop supercomputer sites for research and academic purposes.

References

  1. ↑ "Boo.com WHOIS, DNS, & Domain Info – DomainTools". WHOIS . Retrieved 5 August 2016.
  2. 1 2 3 Chaffey, Dave; Ellis-Chadwick, Fiona (2016). Digital Marketing Strategy, Implementation and Practice (sixth ed.). Harlow: Pearson Education Limited. p. 108. ISBN   978-1-292-07761-1.
  3. 1 2 3 Wray, Richard. "Boo.com spent fast and died young but its legacy shaped internet retailing." The Guardian . 16 May 2005. Retrieved on 12 March 2012.
  4. 1 2 Malmsten, Ernst (2001). Boo Hoo: A dot.com Story from Concept to Catastrophe. Random House Business Books. ISBN   978-0-7126-7239-9.
  5. ↑ "The greatest defunct Web sites and dotcom disasters". CNET. 5 June 2008. Archived from the original on 26 February 2013. Retrieved 5 June 2008.
  6. ↑ Malmsten, Ernst; Portanger, Erik; Drazin, Charles (2001). Boo Hoo. A Dot.Com Story from Concept of Catastrophe. London: Random House.
  7. ↑ Chaffey, Dave; Ellis-Chadwick, Fiona (2016). Digital Marketing Strategy, Implementation and Practice (sixth ed.). Harlow: Pearson Education Limited. p. 109. ISBN   978-1-292-07761-1.
  8. 1 2 Sorkin, Andrew Ross. "INTERNATIONAL BUSINESS; Boo.com, Online Fashion Retailer, Goes Out of Business." The New York Times . 19 May 2000. Retrieved on 12 March 2012.
  9. ↑ Seckler, Valerie, "Boo Names New Boss: Kate Buggelin," WWD, Mon. 17 July 2000, p.14
  10. ↑ Boocom公司为何倒闭.
  11. ↑ "Site Comment: Boo.com (Bohmann Usability)". Archived from the original on 5 June 2011. Retrieved 7 October 2011.
  12. ↑ Roggio, Armando (29 December 2014). "2 Ecommerce Blunders to Avoid in 2015". Practical Ecommerce. Retrieved 6 March 2018.
  13. 1 2 3 "INTERNATIONAL BUSINESS; Fashionmall.com Swoops in for the Boo.com Fire Sale". The New York Times. 2 June 2000. Retrieved 5 February 2022.
  14. ↑ "Tristan Louis (TNL.net)". Tristan Louis (TNL.net).
  15. ↑ "jobfairy.com – Boo! And the 100 Other Dumbest Moments in e-Business History". jobfairy.com.
  16. ↑ "Boo back in business, this time on a budget". 30 October 2000.
  17. ↑ "Top 10 dot-com flops". Archived from the original on 10 February 2014. Retrieved 10 February 2014.
  18. ↑ "boo.com in new travel guise". utalkmarketing.com. 2 May 2007. Archived from the original on 28 September 2007. Retrieved 18 May 2007.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.