Flooz.com
Encyclopedia
Flooz.com was a dot-com
venture, now defunct, based in New York City
that went online in February 1999, promoted by comic actress Whoopi Goldberg
in a series of television advertisements. Started by iVillage
co-founder Robert Levitan, the company attempted to establish a currency
unique to Internet
merchants, somewhat similar in concept to airline frequent flier programs or grocery store stamp books. The name "flooz" was based upon the Arabic word for money, فلوس, fuloos. Users accumulated flooz credits either as a promotional bonus given away by some internet businesses or purchased directly from flooz.com which then could be redeemed for merchandise at a variety of participating online stores. Adoption of flooz by both merchants and customers proved limited, and it never established itself as a widely recognized medium of exchange, which hindered both its usefulness and appeal.
In 2001, Flooz.com was notified by the Federal Bureau of Investigation
that a Russian organized crime syndicate was using Flooz and stolen credit card numbers as part of a money-laundering scheme, in which stolen credit cards were used to purchase currency and then redeemed. Levitan has stated that fraudulent purchases accounted for 19% of consumer credit card transactions by mid-2001.
The company announced its closure on August 26, 2001, perceived as an early indicator of the growing dot-com bust
. Upon the company's closing, all unused flooz credits became worthless and nonrefundable. Over its short history, flooz.com reportedly exhausted from $35 to $50 million in venture capital.
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...
venture, now defunct, based in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
that went online in February 1999, promoted by comic actress Whoopi Goldberg
Whoopi Goldberg
Whoopi Goldberg is an American comedian, actress, singer-songwriter, political activist, author and talk show host.Goldberg made her film debut in The Color Purple playing Celie, a mistreated black woman in the Deep South. She received a nomination for the Academy Award for Best Actress and won...
in a series of television advertisements. Started by iVillage
IVillage
iVillage, Inc. is a media company that is owned by NBCUniversal. The site focuses on categories targeted at women, including Food, Health, Entertainment, Family, Beauty & Style. Additional businesses and brand extensions within iVillage Networks include iVillage UK, NBC Digital Health Network,...
co-founder Robert Levitan, the company attempted to establish a currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
unique to 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...
merchants, somewhat similar in concept to airline frequent flier programs or grocery store stamp books. The name "flooz" was based upon the Arabic word for money, فلوس, fuloos. Users accumulated flooz credits either as a promotional bonus given away by some internet businesses or purchased directly from flooz.com which then could be redeemed for merchandise at a variety of participating online stores. Adoption of flooz by both merchants and customers proved limited, and it never established itself as a widely recognized medium of exchange, which hindered both its usefulness and appeal.
In 2001, Flooz.com was notified by the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
that a Russian organized crime syndicate was using Flooz and stolen credit card numbers as part of a money-laundering scheme, in which stolen credit cards were used to purchase currency and then redeemed. Levitan has stated that fraudulent purchases accounted for 19% of consumer credit card transactions by mid-2001.
The company announced its closure on August 26, 2001, perceived as an early indicator of the growing dot-com bust
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...
. Upon the company's closing, all unused flooz credits became worthless and nonrefundable. Over its short history, flooz.com reportedly exhausted from $35 to $50 million in venture capital.