Here’s an in-depth article from the Seattle PI about all the shenanigans at Infospace. Shocker.

At a dinner party this past week, we agreed that there are some interesting Internet 1.0 ideas that will resurface as Internet 2.0, and there are cautionary tales, funny stories and silliness that might make for interesting blog reading. In that light, I return again to my archives of 4+ years of notes, emails and assorted stuff much of which did not make it into any e-commerce reports. Time for another “where are they now” installment.

Here’s another one, Giftworld. We met with them in January 2000 (notes are below) and they were positioning themselves as an online, upscale gift site, aiming to differentiate by same day fulfillment service. The company was founded by David Waxman and Farrel Miller. I’m not sure if this is the same Farrel Miller who is subsequently google-able as the CEO of JumpTV (streaming TV on the web, still seems to be around, ran into some obvious issues). He doesn’t seem to be on LinkedIn. David Waxman is now managing partner of Equip Ventures. From his bio on that site: From 1999 to 2000, he co-founded, was co-chairman and served at various times as both CEO and COO of Giftworld.com, an ebusiness services and e-commerce startup. Giftworld.com was the third highest-rated gift site on the internet by Gomez Advisors, a leading internet analyst firm. Giftworld.com was ultimately sold to Museum Company, a leading specialty retailer, in 2000.

I wasn’t able to find much information about the sale to Museum Company (I don’t currently have access to Lexis-Nexis or similar, which would be useful in addition to the obvious Google searches) anywhere except his bio or this additional bio which has the following helpful statement: With the shift in investor sentiment from consumer-oriented companies, Mr. Waxman assumed the CEO role and engineered a shift in company strategy, raised additional capital and executed an acquisition to emerge as an innovative wireless gift services company, which he engineered the acquisition by Museum Company, a leading specialty retailer, in early 2001.

I’m not sure what a “wireless gift services company” would be precisely, innovative I’m sure (perhaps it relates to random gifting based on your location? very Neil-Stephenson-esque!), but it seems like a very strategic repositioning just as ecommerce was getting cold and wireless commerce was getting hot (the latter still hasn’t panned out, whereas ecommerce is very definitely thriving these days, as predicted).

Here are some notes from the January 19, 2000 meeting, taken by one of our research associates, (meeting with Farrel G. Miller, CEO and Stephen Smyk, Director of Marketing and Business Development), enjoy:

Target market:
- Somewhat upscale, like Bloomingdale? market
- Not as high target as Luxury Finder, not as low as gifts.com

Overview:
- Launched in July 1999
- $2-8 million in funding to date (first round)
- Started by 5 merchandisers, headed by ex-Bloomies person

Business Highlights:
- Service important - Manus must confirm fulfillment within a two hour period and drop ship, or else they follow up
- Packaging - it? all in the details - Velvet packaging given to suppliers who drop ship
- 80& of product orders drop shipped from manufacturer in packaging
- Looking to work with 40% gross margins
- Looking to supply unique (not commodity) products
- Branded products, e.g., Movado, Gund, where supplier knows we will not discount the price point
- Aspiring for breadth, not depth, we narrow down to specific products in each category for you
- 22 categories to date for men, women, executives, home and beauty, etc.
- 1150 products on site to date, expect to ramp up quickly, with 2500 on site within the next 30 days and growing
- More products in the database waiting to go live, expecting to max out at around 5,000 products
- Site allows consumers to search by category, occasion, price, recipient
- Personal shopper to come in near future
- Highlight best sellers by category
- 25-30% of sales to date are corporate customers. Each employee can have own account and password within a corporation
- Planning to forge relationships with Manus to private label and customize products
- Payment: monthly billing offline, check account online

Fulfillment Strategy and Products:
- Same day delivery of products to be point of difference in major cities (top 12 cities in the country)
- Chiasso, Chicago-based company like a Sharper Image, partnered for same day fulfillment capabilities
- Same day available if ordered by 1pm local time
- Order is emailed to the store (except in NY, where inventory is housed in office)
- Orders prepared in 90 minutes (their timing indicates) and picked up by Boston based courier service, Simplex
- Currently setting up alliances with other couriers in major US cities
- Pursuing deals in which a certain percentage of their stock is reserved for us and our delivery purposes, in which their inventory is able to be updated periodically throughout the day
- If reserve stock runs out, partner must contact Giftworld and accommodate merchandise needs

Marketing:
- Targeting the corporate gift community who gift regularly
- Ad banners online, anchor site is CNNsi, after another VC round, aiming to strike co-branding deals with PeopleSupport and Hearst print: Esquire and MarieClaire
- Customer Service: Exclusive deal with PeopleSupport

Thoughts from Mark Lucovsky about Microsoft’s HailStorm project (aka .Net MyServices, both of which are clearly pre-naming consultant!) that generated a lot of buzz and interest three or four years ago. Good comment thread as well. He distils the essence of HailStorm into:

Network Centric, Extensible Data Model, for Everyday Data
Data Decoupled from Applications
Anytime, Anyplace, and from Any Device Access
Identity Centric Data Access

And it’s pretty easy to see pieces of that floating around in our Web world these days… not yet unified into as grand a vision. Not yet.

I’m strolling down memory (email) lane from 1999 and 2000, and it’s hard not to find funny stuff. Here’s a great email sent to a group of us by a technology analyst wondering what to do about this particular press inquiry. Amazing that a reporter actually thought this was a viable business model and wanted commentary on it. Guess it wasn’t a complete disaster… since today you can get email at some of these addresses:

—–Original Message—–
Sent: Thursday, February 10, 2000 7:15 AM
To: research@jup.com
Subject: DataPimp.com?

I just got a press inquiry from a reporter looking at a company called DataPimp.com. Their rather unique business model is that they let you register domains that are somewhat racy, like lazy-son-of-a-bitch.com and ones much more profane than that. They’re obviously using a registrar other than Network Solutions, who doesn’t allow these kinds of domain names.

Buy.com filed for an IPO again, having gone out, almost gone out of business, and taken private. I recall an email sent to me by one of our other analysts at Jupiter 02/07/2000 in response to their numbers (back then):

—–Original Message—–
Sent: Monday, February 07, 2000 6:25 AM
To: Robert Leathern
Subject: Re: Buy.com

NEGATIVE gross margins. this means that as they scale, they can only lose more money. the best thing that could happen to buy.com would be if people just stopped buying from them altogether. this business model is a joke.

It’s nice to see somethings haven’t really changed…

Going back through some of my old notes (actually archiving all this stuff has to have some value to someone sometime, not so?). I figure I can look back at some of my old notes, think about successes and failures alike and see if there any useful anecdotes as we go through the next boomlet…

Company: Savvio
Meeting date: 7/10/2000
Person: Karen Ha, founder, president and CEO
Overview: Savvio offered a declining price mechanism for perishable goods and services starting with travel products. The idea was to get inventory fairly late in the process (e.g. 30 days before the cruise sets sail), price it at 10-20 percent off list then start a process where the price is declining at a rate that may or may not accelerate (coming up with that rate of change was ‘proprietary’) — once the ticket is sold then the amount of revenue over the reserve price gets split with the supplier. Savvio’s goal was to reach the “savvy” price-conscious customer who was more mainstream that a Priceline or Hotwire user and not willing to jump through as many hoops to get the “best” price… but willing to do enough to get a really good price.
Key problems: Market segmentation - it might have been too early for this niche of “lazy but price sensitive” shoppers. Notification and lock in - how do you get the customer to commit to a price and/or keep coming back to check progress and make a commitment when the price may continue to fall? Although Savvio focused on making it a more (but not completely) transparent transaction for consumers, that very fact made their model hard to execute and scale - and they promised a really good (but not the lowest) price. It was still too much work… Building themselves as a destination site at the same time [CNET article] guys like Hotwire were launching was hard enough, but of course in travel, scaling up suppliers is a key challenge. Hotwire, Priceline and Orbitz had suppliers in their corner as investors too early.
Key quote: “We don? think Priceline has a broad enough appeal.”
Investors: Pyramid Technology Ventures
Enddate: 1/8/2001 (bravo - they cut their losses pretty early on)

Where Are They Now?: Karen Ha is a “Venture Partner of Athena Technology Ventures“. It’s unclear what happened to the technology, but given their short life-cycle, there was probably not that much salvageable there. Lesson for me here is that changing consumer AND merchant behavior at the same time is really really hard. Also know when (in a crowded marketplace) to throw in the towel.