Boo.com
Encyclopedia
Boo.com was a British
Internet
company, founded by Swedes
Ernst Malmsten, Kajsa Leander and Patrik Hedelin, which went bust following the dot-com boom of the late 1990s.
After several highly publicised delays, Boo.com launched in the autumn of 1999 selling branded fashion apparel over the Internet
. The company spent $135 million of venture capital
in just 18 months, and it was placed into receivership on 18 May 2000 and liquidated.
In June 2008, CNET hailed Boo.com as one of the greatest dot-com busts in history.
Ernst Malmsten wrote about the experience in a book called Boo Hoo: A dot.com Story from Concept to Catastrophe, published in 2001.
The fundamental problem was that the company was following an extremely aggressive growth plan, launching simultaneously in multiple European countries. This plan was founded on the assumption of the ready availability of venture capital money to see the company through the first few years of trading until sales caught up with operating expenses. Such capital ceased to be available for all practical purposes in the second quarter of 2000 following dramatic falls in the NASDAQ presaging the "dot crash" following the Dot-com bubble
. Boo was only the first of numerous similar Dot-com company
failures over the subsequent two years.
conventions. The site relied heavily on JavaScript
and Flash
technology to display pseudo-3D views of wares as well as Miss Boo, a sales-assistant-style avatar
. The first publicly released version of the site included many large pages; the home page, for example, was several hundred kilobytes which meant that many users had to wait minutes for the site to load, as broadband
technologies were not widely available at the time. The site's front page contained the warning, "this site is designed for 56K modems and above".
The complicated design required the site to be displayed in a fixed-size window, which limited the space available to display product information to the customer. Navigation techniques changed as the customer moved around the site, which appealed to those who were visiting to see the website but frustrated those who simply wanted to buy clothes.
The site's interface was complex and included a hierarchical system that required the user to answer four or five different questions before sometimes revealing that there were no products in stock in a particular sub-section. The same basic questions then had to be answered again until results were found.
). Poor management and a lack of communication between departments resulted in rapid growth in costs. The effectiveness of an expensive ad campaign was limited because the website wasn't ready in time, resulting in curious visitors being greeted with a holding page.
Staff and contractors were recruited in large numbers, with a lack of direction and executive decision about how many people were required, resulting in high payroll costs.
's wealthy Hariri family, which put nearly £20 million into the company.
Creditors, most of whom were advertising agencies, were owed around £12 million. Over 400 staff and contractors were made redundant in London and around the world, and many had not been paid for several months.
In a widely circulated article, Tristan Louis
blamed the management of the company for its failure.
Fashionmall.com, which has been operating since 1994, bought the remains of Boo.com which included brand, Web address and advertising materials but this deal did not include any physical assets, software or distribution channels. The deal also included the Miss Boo character. Boo's main assets, its software and technology, was sold to Bright Station for $250,000. Boo.com had purchased this technology for $70 million. Bright Station is a British
company run by Internet
entrepreneur Dan Wagner
.
Less than $2 million was earned by selling all Boo's remaining assets.
As late as 2003, stickers from their guerrilla marketing
campaigns could still be seen in London, with the slogan "Fashion never dies!".
In 2005 CNET
called Boo.com the sixth greatest dot-com flop.
In October 2010, the new boo.com site announced that it was closing down with effect from 1 November 2010.
http://www.boo.com now redirects to http://www.hostelworld.com/.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
company, founded by Swedes
Swedes
Swedes are a Scandinavian nation and ethnic group native to Sweden, mostly inhabiting Sweden and the other Nordic countries, with descendants living in a number of countries.-Etymology:...
Ernst Malmsten, Kajsa Leander and Patrik Hedelin, which went bust following the dot-com boom of the late 1990s.
After several highly publicised delays, Boo.com launched in the autumn of 1999 selling branded fashion apparel over the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
. The company spent $135 million of venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
in just 18 months, and it was placed into receivership on 18 May 2000 and liquidated.
In June 2008, CNET hailed Boo.com as one of the greatest dot-com busts in history.
Ernst Malmsten wrote about the experience in a book called Boo Hoo: A dot.com Story from Concept to Catastrophe, published in 2001.
Timing
Although there were several months of delays prior to launch and problems with the user experience when boo.com first launched, these had been largely cured by the time the company entered receivership. Indeed sales had grown rapidly and were around $500,000 for the fortnight prior to the site being shut down.The fundamental problem was that the company was following an extremely aggressive growth plan, launching simultaneously in multiple European countries. This plan was founded on the assumption of the ready availability of venture capital money to see the company through the first few years of trading until sales caught up with operating expenses. Such capital ceased to be available for all practical purposes in the second quarter of 2000 following dramatic falls in the NASDAQ presaging the "dot crash" following the Dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
. Boo was only the first of numerous similar Dot-com company
Dot-com company
A dot-com company, or simply a dot-com , is a company that does most of its business on the Internet, usually through a website that uses the popular top-level domain, ".com" .While the term can refer to present-day companies, it is also used specifically to refer to companies with...
failures over the subsequent two years.
Problems with the user experience
The boo.com website was widely criticized as poorly designed for its target audience, going against many usabilityUsability
Usability is the ease of use and learnability of a human-made object. The object of use can be a software application, website, book, tool, machine, process, or anything a human interacts with. A usability study may be conducted as a primary job function by a usability analyst or as a secondary job...
conventions. The site relied heavily on JavaScript
JavaScript
JavaScript is a prototype-based scripting language that is dynamic, weakly typed and has first-class functions. It is a multi-paradigm language, supporting object-oriented, imperative, and functional programming styles....
and Flash
Adobe Flash
Adobe Flash is a multimedia platform used to add animation, video, and interactivity to web pages. Flash is frequently used for advertisements, games and flash animations for broadcast...
technology to display pseudo-3D views of wares as well as Miss Boo, a sales-assistant-style avatar
Avatar (computing)
In computing, an avatar is the graphical representation of the user or the user's alter ego or character. It may take either a three-dimensional form, as in games or virtual worlds, or a two-dimensional form as an icon in Internet forums and other online communities. It can also refer to a text...
. The first publicly released version of the site included many large pages; the home page, for example, was several hundred kilobytes which meant that many users had to wait minutes for the site to load, as broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
technologies were not widely available at the time. The site's front page contained the warning, "this site is designed for 56K modems and above".
The complicated design required the site to be displayed in a fixed-size window, which limited the space available to display product information to the customer. Navigation techniques changed as the customer moved around the site, which appealed to those who were visiting to see the website but frustrated those who simply wanted to buy clothes.
The site's interface was complex and included a hierarchical system that required the user to answer four or five different questions before sometimes revealing that there were no products in stock in a particular sub-section. The same basic questions then had to be answered again until results were found.
Market analysis
During the second half of 1999, the company conducted market research in several countries. The project was coordinated from London. The research company MOA (Market Opinion Analysis) conducted the survey in Sweden. The analysis was based on a rather complex model of how clothes were chosen by the consumer and then bought or sold. MOA's analysts claimed that the site worked neither as a marketing tool nor as a channel for sales and distribution, and that the target audience was not ready to buy large quantities on the web, at least not in the short and medium term. The research company also shed light on other problems with the site, including logistics and payment systems.Burn rate
Boo.com spent £125 million ($188 million) in just six months. Boo.com's sales did not match expectations, due partly to a higher-than-expected rate of product returns (a service that was offered for free, but charged for by their logistics supplier Deutsche PostDeutsche Post
Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
). Poor management and a lack of communication between departments resulted in rapid growth in costs. The effectiveness of an expensive ad campaign was limited because the website wasn't ready in time, resulting in curious visitors being greeted with a holding page.
Staff and contractors were recruited in large numbers, with a lack of direction and executive decision about how many people were required, resulting in high payroll costs.
Aftermath
The biggest loser among boo.com's investors was Omnia, a fund backed by members of LebanonLebanon
Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...
's wealthy Hariri family, which put nearly £20 million into the company.
Creditors, most of whom were advertising agencies, were owed around £12 million. Over 400 staff and contractors were made redundant in London and around the world, and many had not been paid for several months.
In a widely circulated article, Tristan Louis
Tristan Louis
Tristan Louis is a French-born American author, entrepreneur and blogger.-Early work:...
blamed the management of the company for its failure.
Fashionmall.com, which has been operating since 1994, bought the remains of Boo.com which included brand, Web address and advertising materials but this deal did not include any physical assets, software or distribution channels. The deal also included the Miss Boo character. Boo's main assets, its software and technology, was sold to Bright Station for $250,000. Boo.com had purchased this technology for $70 million. Bright Station is a British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
company run by Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
entrepreneur Dan Wagner
Dan Wagner
Dan Wagner is an English entrepreneur and businessman. He was one of the first British-based Internet entrepreneurs, having founded M.A.I.D in 1984, a company which provided online information services...
.
Less than $2 million was earned by selling all Boo's remaining assets.
As late as 2003, stickers from their guerrilla marketing
Guerrilla marketing
Guerrilla warfare is about waging small intermittent attacks on different territories of the opponent with the aim of harassing and demoralising the opponent and eventually securing permanent footholds....
campaigns could still be seen in London, with the slogan "Fashion never dies!".
In 2005 CNET
CNET
CNET is a tech media website that publishes news articles, blogs, and podcasts on technology and consumer electronics. Originally founded in 1994 by Halsey Minor and Shelby Bonnie, it was the flagship brand of CNET Networks and became a brand of CBS Interactive through CNET Networks' acquisition...
called Boo.com the sixth greatest dot-com flop.
Current state of the domain
In May 2007 Web Reservations International turned boo.com into a travel site with reviews and listings. When the new site launched, it already had more than one million user reviews which had been collected from existing WRI travel sites.In October 2010, the new boo.com site announced that it was closing down with effect from 1 November 2010.
http://www.boo.com now redirects to http://www.hostelworld.com/.
External links
- Boo.com (Archive)
- Jakob Nielsen's mini-review of Boo.com - A design/usability perspective
- Boo.com Goes Bust - An insider's perspective
- archived version of boo.com
- Case study on Boo.com for marketing and business students