Pets.Com Essay

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Journal of Business Case Studies – May 2008 Volume 4, Number 5 What A Dog Fight! TKO: Pets.com Erika Matulich, University of Tampa Karen Squires, University of Tampa ABSTRACT The case covers the startup of Pets.com, an online retailer of pet supplies. Pets.com made its entry into a heavily competitive but potentially lucrative market. Despite heavy capital funding and a number of high-profile strategic initiatives, the company closed its doors in November, 2000. The demise of Pets.com is considered to be one of the highest-profile dotcom failures. Keywords: SWOT analysis, pro forma financial statements, IPO, initial public offering, strategic analysis. BIRTH OF A BUSINESS B ack in 1994, Greg McLemore, a 31-year old California entrepreneur, registered the Pets.com web address and launched an online community for pet owners. The site lingered on until its potential was noticed by several entrepreneurs and investors. By 1998, Pets.com added e-commerce capabilities and brought web-veteran Julie Wainright to the helm. Her first act was to offer a 50-percent stake in the business to the formidable Amazon.com. Jeff Bezos, Amazon’s CEO, who took the opportunity in his effort to move from books, videos, and CDs into offering consumers “anything they might want to find online.” i Along with Amazon, blue-chip venture capitalists Hummer Winblad Partners, Bowman Capital, and Catalyst Investments LLC raised nearly $110 million in four rounds of private-placement funding by December, 1999. This capital allowed Pets.com to invest in the necessary hardware and human resources to run a true e-commerce site. At this time, Julie Wainright put the new mission statement on the website: “Pets.com is committed to serving pets and their owners with the best care possible through, products, information, and service. Pets.com is an online retailer of pet products,

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