(Disestablished in 2000)
|Key people||Ernst Malmsten
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, 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.
Ernst Malmsten wrote about the experience in a book called Boo Hoo: A dot.com Story from Concept to Catastrophe, published in 2001.
Reasons for failure
|This section does not cite any references or sources. (November 2009)|
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 cured by the time the company entered receivership. Indeed 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 only the first of numerous similar Dot-com company failures over the subsequent two years.
Problems with the user experience
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, which appealed to those who were visiting to see the website but frustrated those who simply wanted to buy clothes.
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.
During the second half of 1999, the company conducted market research in several countries. The project was coordinated from London. The research company MOA (Market Opinion Analysis) conducted the survey in Sweden. The analysis was based on a rather complex model of how clothes were chosen by the consumer and then bought or sold.[clarification needed] MOA's analysts claimed that the site worked neither as a marketing tool nor as a channel for sales and distribution, and that the target audience was not ready to buy large quantities on the web, at least not in the short and medium term. The research company also shed light on other problems with the site, including logistics and payment systems.
Boo.com spent £125 million ($188 million) in just six months. 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 because the website wasn't 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.
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.
Fashionmall.com, which has been operating since 1994, bought the remains of Boo.com which included brand, Web address and advertising materials but this deal did not include any physical assets, software or distribution channels. The deal also included the Miss Boo character. Boo's main assets, its software and technology, were sold to Bright Station for $250,000. Boo.com had purchased this technology for $70 million. Bright Station is a British company run by Internet entrepreneur Dan Wagner.
Less than $2 million was earned by selling all Boo's remaining assets.
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.
In October 2010, the new boo.com site announced that it was closing down with effect from 1 November 2010.
Boo.com now redirects to Hostelworld.com, another one of WRI's websites.
Headquarters and offices
The company had its headquarters along Carnaby Street in London in a building which it initially shared with the Erotic Review Magazine. The company initially had 40 employees. In October 1999, it had a total of eight offices and 400 employees. Cities which hosted offices of the company included Amsterdam, Munich, New York City, Paris, and Stockholm.
- Malmsten, Ernst (2001). Boo Hoo: A dot.com Story from Concept to Catastrophe. Random House Business Books. ISBN 978-0-7126-7239-9.
- "The greatest defunct Web sites and dotcom disasters". CNET. 5 June 2008. Retrieved 2008-06-05.
- "INTERNATIONAL BUSINESS; Fashionmall.com Swoops In for the Boo.com Fire Sale". The New York Times. 2 June 2000. Retrieved 2010-04-26.
- Boo.com Goes Bust
- INTERNATIONAL BUSINESS; Fashionmall.com Swoops In for the Boo.com Fire Sale - New York Times
- jobfairy.com - Boo! And the 100 Other Dumbest Moments in e-Business History
- Top 10 dot-com flops - CNET.com
- "boo.com in new travel guise". utalkmarketing.com. 2 May 2007. Archived from the original on 28 September 2007. Retrieved 2007-05-18.
- 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.
- 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.
- Boo.com (Archive)
- Jakob Nielsen's mini-review of Boo.com - A design/usability perspective
- Boo.com Goes Bust - An insider's perspective
- archived version of boo.com
- Case study on Boo.com for marketing and business students