Companies that vanished: Pets.com — the sock puppet dies

08 06 2008

Companies that vanished: Pets.com — the sock puppet dies

Posted by: in Marketing and Advertising

Filed under: Internet, Amazon.com (AMZN), Marketing and advertising, Initial public offerings

This post is part of a series on some of the most memorable companies that have disappeared.

What goes up, must come down. It was a cute ad. Who knew it would turn out to be so prophetic?

Pets.com will go down in history as a textbook example of dot-com flame-out, going from IPO to liquidation in nine short months.

Founded in 1998, the company, which had the bright idea of selling pet food and supplies to the public via the web, went public in February 2000 and raised $82.5 million.

The pet supplies e-tailer was the second Amazon.com-affiliated company to go public after an investment by the e-commerce giant, according to press accounts at the time. On the web pharmacy and Amazon.com (NASDAQ: AMZN) affiliate Drugstore.com, launched in 1997, raised $90 million in an IPO in July of 2000 and saw its shares more than double on its first day of trading.

But Pets.com entered an already crowded field of on the internet pet stores (PetSmart.com and PetStore.com were also up and running, among several others), and investors were starting to ask unsightly questions such as, “How are you making money?” that they weren’t asking in the late 1990s, when “irrational exuberance” ruled the day. The stock was ultimately a flop, with the price briefly hitting $14 a share before falling back to its opening price of $11.

By November of 2000, however, things had gone barking up the entirely wrong tree, and Pets.com filed for bankruptcy protection. Rival PetSmart.com acquired some of the company’s assets, as well as its domain name.

In the end, the ideal thing about the company was its wildly popular sock puppet mascot. According to its Wikipedia entry, after the company closed, Hakan and Associates and Bar None Inc. bought the rights to the sock puppet mascot under a joint venture called Sock Puppet LLC.

Drugstore.com (NASDAQ: DSCM) is still in operation.

Let us know in the comments what you miss about Pets.com. And be sure to check out other Companies That Have Vanished.