Egghead Software

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Egghead, Inc.
FateBankruptcy; Domain name acquired by
Founded1984; 36 years ago (1984)
FounderVictor D. Alhadeff
DefunctDecember 2001; 19 years ago (2001-12)
ProductsComputer software
Employee coffee cup, circa 1988

Egghead Software was a computer software retailer. Founded in 1984, it filed bankruptcy in 2001 and its domain name was acquired by


The company was founded by Victor D. Alhadeff in 1984, as a single store in Bellevue, Washington.[1]

Customers were able to sign up for a "CUE" card ("Customer Updates and 'Eggs'tras") that would provide discounts.[2]

By June 1987, when Alhadeff was 40 years old, the company had 50 stores on the West Coast of the United States.[3]

In June 1988, the company became a public company via an initial public offering. Within a year, the stock price dropped from $17 per share to $11 per share and top executives, including the founder, were sued for fraud for failing to disclose material facts about the true condition of the company`s inventory systems and finances.[4]

By December 1989, the company had 206 stores, but closed 20 of them due to losses and inventory issues and theft.[5]

In June 1993, the company released its first software product, Egghead Express, which allowed customers to place and manage orders.[6]

In 1995, the company moved its headquarters from Issaquah, Washington, east of Seattle, to Spokane. At that time it had 2,500 employees and operated retail stores in 30 states.[7]

Also in 1995, when the development manager of Windows 95 wanted to test compatibility, he bought a copy of every program for sale at an Egghead store.[8]

In 1996, George Orban became chairman and in January 1997, he became CEO.[9]

In May 1996, Egghead sold its Corporate, Government & Education division to Software Spectrum for $45 million.[10][11][12] At that time, the stock price was $6 per share and there was speculation of a takeover of the company.[13]

In February 1997, the company announced it would close 77 of its 156 stores and reported additional losses.[14]

In May 1997, the company acquired competitor Surplus Software Inc. for $31.5 million.[15]

In January 1998, the company reported a loss and announced it will close all 80 of its remaining stores, layoff 600 of its 800 employees, and sell only through its website, Its stock price fell 18% on the news.[16][7][1]

In July 1998, during the dot-com bubble, shares soared to $25 as investors bought up shares of internet companies.[17]

In 1999, the company merged with in a $375 million all-stock transaction. The company kept the name and the CEO of Onsale, Jerry Kaplan, became CEO of the combined company.[18][19][20]

In December 2000, right before Christmas, the company's servers were compromised, and it feared that the credit card data of over 3.7 million people was stolen.[21][22] The company first publicly denied that there was a problem, then notified Visa Inc., which notified banks, who notified consumers, causing the breach to escalate into a full blown scandal.[23][24] Many credit cards were cancelled.[25] The company later discovered that credit card information was not obtained.[26]

In August 2001, the company filed bankruptcy and worked out a deal to be acquired by Fry's Electronics.[27] However, the deal fell apart after Fry's accused Egghead of failing to provide financial documents, and in December 2001, the company sold its domain name to[28]


  1. ^ a b Emert, Carol (January 29, 1998). "Egghead Will Close Its 80 Stores". San Francisco Chronicle.
  2. ^ "Step Up Your System!". InfoWorld. April 5, 1993.
  3. ^ Zielenziger, Michael (June 8, 1987). "'EGGHEAD' SOFTWARE CHAIN IS SCRAMBLING TO THE TOP". The Washington Post.
  4. ^ Lalonde, James E. (August 20, 1989). "EGGHEAD EXECS SUBPOENAED IN FRAUD PROBE". Chicago Tribune.
  5. ^ Johnston, Stuart J. (December 4, 1989). "Egghead Software to Close 20 Retail Stores". InfoWorld.
  6. ^ "Egghead Software to introduce first product". United Press International. June 23, 1993.
  7. ^ a b "Egghead Closing All Retail Stores". The New York Times. Associated Press. January 29, 1998.
  8. ^ Chen, Raymond (August 24, 2005). "Buying an entire Egghead Software store". Microsoft.
  9. ^ "George P. Orban – Inc (eggs)". TWST. December 28, 1998.
  10. ^ "company news software spectrum plans to buy egghead division". The New York Times. Dow Jones & Company. March 26, 1996.
  11. ^ Carney, Dan (August 11, 1996). "Software Spectrum absorbs Egghead fed biz, aims for larger market". Federal Computer Week.
  12. ^ "Egghead, Inc. Form 10-Q Quarterly Report for the Second Quarter of 1996". U.S. Securities and Exchange Commission.
  13. ^ Murphey, Michael (September 22, 1996). "Egghead Fights For Survival Shrinking Software Company Faces The Possibility Of A Takeover Attempt". The Spokesman-Review.
  14. ^ "Egghead closes stores locally, nationally". Colorado Springs Business Journal. February 7, 1997.
  15. ^ Jones, Grayden (May 2, 1997). "Egghead To Acquire Competitor Spokane-Based Company Buying Surplus Software In Deal Worth $31.5 Million". The Spokesman-Review.
  16. ^ "Egghead to Close All Stores To Focus on Net Commerce". The Wall Street Journal. January 28, 1998.
  17. ^ "CNNfn market movers". CNN. July 13, 1998.
  18. ^ "Egghead, Onsale complete merger". CNET.
  19. ^ Anders, George (July 15, 1999). " and Onsale Announce A $375 Million Merger Agreement". The Wall Street Journal.
  20. ^ "Egghead, Onsale merge". CNN. July 14, 1999.
  21. ^ Lemos, Robert (December 22, 2000). "Egghead cracked; data at risk". ZDNet.
  22. ^ HARRIS, RON (December 22, 2000). "Online Retailer Hacked". Associated Press.
  23. ^ Greene, Thomas C. (April 27, 2001). "Egghead credit card hack: serious questions remain". The Register.
  24. ^ Lemos, Robert. "Egghead silent; customers angry". CNET.
  25. ^ Kirby, Carrie (January 11, 2001). "Fallout Remains From Hacking / Some credit cards canceled due to breach". San Francisco Chronicle.
  26. ^ Lemos, Robert. "Lengthy Egghead investigation costs banks millions". CNET.
  27. ^ "Egghead files for Chapter 11 bankruptcy". ZDNet. August 15, 2001.
  28. ^ DiSabatino, Jennifer (December 5, 2001). "Amazon buys". Computerworld.