[quote=markmax33][quote=flu]Lots of people used pets.com and webvan also. Traffic doesnt always mean a viable business but you know that dont you? Yahoooooooo!!!!!!!
When I use to live in the bay area. My favorite story as a customer was buying my Audi in Jan/2000 from carorder.com
They’re business model: grab as many customers as you can, because that’s what VC’s like.
So they subsidized all car purchases.
I bought a $35k car without haggling for $7k.. They subsidized the car purchase by sending the dealer a $7k check and all I had to do was place the order through them. I took delivery at the dealership (Rector Motorcars) and just paid the difference. Told my buddy about it, and we bought 5 additional cars (Infiniti) $7k subsidized…We sold the remaining 4 used and pocketed the difference. Again, all because carorder wanted a large customer list. I wish I could have gotten those subsidies last year off of both the x5 and the 550….
Needless to say, we know what happened to carorder.
There use to be an old saying back in the bay area.
The bigger the red number, the more glorious it is! I kid you not. Those were the days.[/quote]
This analogy is completely irrational. Squeezing a few fractions of a percent from a transaction is not subsidizing 75% of it. There is actually value added with the website that can and will lower transaction cost, customer aquistion, etc. It is a solid business model.[/quote]
Slow there mark.
Carorder was subsidizing car purchases (unlike carsdirect, which was a referral/broker service) for just about everyone purchasing a car.It’s not a small percentage of the transaction dude. Because it wasn’t their transaction, it was still the dealers. The dealers held the cars, had the inventory…The only thing carorder was doing is referring customers from their website, and assisting the purchase buy cutting a check between the difference that they advertised on their website (which was ridiculously low and unprofitable for anyone) and what the dealer could sell themselves. Carorder was cutting dealers a check for $7k just for the privilege of putting me and everyone else down as a “customer”… So hence, why I said they were bleeding red from day 1.Someone forgot to inform carorder that unlike other types of businesses, buying a car isn’t exactly a repeat business in which you’re going online every week to buy something in which people’s eyeballs are going to be glued to the website…
It’s no different the pets.com…Shipping a 20lb+/$5 dog food fedex overnight wasn’t the most brilliant business model either, even in 2000 when shipping costs were not nearly as ridiculous as they are now…Webvan failed for similar reasons, as did eToys (which my relative underwrote the IPO).
I could also go on about all the B2B/EAI companies that was “hot” at the time too and all were eventually bled to death too. Vitria, CommerceOne, ATG, onDisplay, Iona, Ariba(ok, they are still around), Peregrine (accounting scndal), BEA (ok they were ok with WebLogic), SeeBeyond (bought by Sun).
….I just find it surprising that for someone like yourself who so fixated about financial responsibility and non-government interventation that you would think some of these new .com companies are actually worth these ridiculous valuations by themselves.
Zynga is not going anywhere. As is groupon. As is angie’s list. As is linkedin. Some of them are probably still within a lockout window which keeps the shares afloat…They might get a pop when facebook finally ipos, because of the frenzy buying and hype, but short of facebook, I don’t see any of the others surviving for the long haul. Zygna will eventually be acquired by another game company…That is, unless our government decides to intervene, and create an artificial low interest rate environment, stimulate ridiculous speculation in the equity markets, so that banks/underwriters and once again reinflate the IPO bubble. Now, they wouldn’t do that would they???? So it’s ironic….Mark…Most of these .com companies directly depend on the so called artificial government hand in order to survive. You seem to dig all this interesting valuation of a .com company, and yet so anti-government about intervention… What to do, what to do….
