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10 Tech Companies That Totally Imploded


7
Pets.com
The Pets.com spokespuppet was cute, but it couldn't save the company. ©Bob Riha/Liaison/Getty Images
The Pets.com spokespuppet was cute, but it couldn't save the company. ┬ęBob Riha/Liaison/Getty Images

Pets.com, founded in 1998, was an online seller of pet supplies including food and accessories. It received more than $100 million in venture capital, and went public in February 2000, raising another $82.5 million [sources: Wolverton, Tarsala]. Its mascot was a cute and popular dog sock puppet that, in commercials, talked to pets in the street, and the catchy tagline was, "Pets.com. Because pets can't drive." The company spent many millions on marketing, including a multi-million dollar Super Bowl ad, resulting in a much higher than normal per-customer acquisition cost (possibly as much as $300) [source: Machan]. Pets.com acquired its competitor Petstore.com, and partnered with Amazon, which in the end owned a 30 percent stake in the company.

At their highest point, Pets.com stock prices were $14 a share, but dropped to less than a dollar, all within the same year [sources: Goldman, Wolverton]. The site never managed to get beyond the point of losing more than it was making on every sale. Pets.com posted a $147 million loss in the first three quarters of 2000, and after the dot-com bust, it was unable to raise the further funds it needed to keep operating [source: Goldman]. It closed down in November 2000. Notably, after failing to find a buyer, the company declined to file for bankruptcy and instead decided to sell off its assets and distribute the money to its shareholders so that they weren't left with nothing.


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