LAYOFFS, STOCK DROPS PROVE FIRMS BOASTING THEY'D BE "NEXT AMAZON" WERE RIGHT

Some Even Outperform Amazon.com’s Underperformance

Reston, Va. (SatireWire.com) – Investors know Internet companies often can’t back up their promises, but one common boast has some dot-com executives crowing “I told you so.” Several online firms that once predicted they would be “the Amazon.com” of their markets have come through, Amazon-style, by laying off staff and watching their stock prices fall through the floor. A few have even exceeded expectations by closing up shop entirely.

“I said we’d be the Amazon.com of our market, and just look at how close our numbers track,” beamed Talk.com CEO Gabe Battista, who in November of 1998 told The Industry Standard his firm would be the Amazon.com of telecomm. “Right now, our stock is 74 percent off its high. Amazon’s is 70 percent off its high.

“I’m not saying I’m psychic,” he added, “but sometimes I scare myself.”

Arguably, no prediction was scarier than that of the ironically named Boo.com, the online clothing retailer that folded less than a year after the Dallas Morning News noted its founders hoped to create “the Amazon.com of active sportswear.”

“We overshot a bit, but it’s always better to outperform than underperform,” remarked Boo.com founder Ernst Malmsten, who said he will soon launch an online fashion marketplace that will be “the Hindenburg of the ready-to-wear market.”

Indeed, many of the companies making the Amazon.com pledge have, at least temporarily, outdone themselves. MotherNature.com, which Inc. called the “Amazon of the wellness industry,” is 93 percent off its high, while eToys – “the Amazon.com of toys” according to a November, 1998 Washington Post story – is down 94 percent. And as for Reel.com:

¤ “We want to be the Amazon.com of videos.” – Reel.com CEO Stuart Skorman, Wired News, April 21, 1997.
¤ “Reel.com laid off its entire e-commerce staff earlier this month and turned over its e-tail operations to Buy.com.” – CNET, June 28, 2000.

While exceeding expectations is usually welcomed by investors, some executives are concerned they will lose investor trust if they don’t stick closer to Amazon. For instance, two years ago, DrKoop.com CEO Donald Hackett told The Industry Standard his firm would be the Amazon.com of its market. Hackett now concedes he was too modest.

“We’re trading at about $2 a share, so we’re actually 94 percent off our high,” said Hackett. “I really don’t think we’re going up any, so we’re hoping Amazon.com comes down a bit.”

But Kevin Coelho, an analyst at Morgan Stanley Dean Witter, said that’s unlikely. “Amazon has fared poorly, but I don’t see them falling another 20 percent. Unless,” he added, “they themselves come out and say that they’re going to be the next Amazon. That could do it.”

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