Pets.com

On November 21, 1994, the Pets.com domain name was registered by Pasadena-based entrepreneur Greg McLemore.{{Cite web|url=http://whois.domaintools.com/pets.com|title=Pets.com WHOIS, DNS, & Domain Info – DomainTools|website=whois.domaintools.com|language=en|access-date=2018-06-18}}{{Cite book|title=Pets.com Inc.: The Rise and Decline of a Pet Supply Retailer|last=Merlo|first=Omar|publisher=Ivey Publishing|year=2009|pages=5}} The Pets.com website launched in early November 1998 as a spinoff of WebMagic{{Cite news|url=https://www.webmagic.com/yahoo-news/|title=Yahoo! News – WebMagic|date=1998-11-04|work=WebMagic|access-date=2018-06-18|language=en-US}}{{Cite news|url=https://www.webmagic.com/yahoo-finance-3/|title=Yahoo! Finance – WebMagic|date=1999-03-29|work=WebMagic|access-date=2018-10-29|language=en-US}} and Pets.com was incorporated in February 1999. After its start by Greg McLemore and Eva Woodsmall, Pets.com was purchased in early 1999 by Julie Wainwright.{{Cite news|url=https://www.newsweek.com/amazons-pet-projects-167136|title=Amazon's Pet Projects|date=1999-06-20|work=Newsweek|access-date=2018-10-01|language=en}} Amazon.com was involved in Pets.com's first round of venture funding, purchasing a majority 54% stake in the company.{{cite web |url=http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle&ID=232871&highlight= |title=Amazon.com Announces Investment in Pets.com |date=March 29, 1999 |access-date=February 14, 2014 |archive-url=https://web.archive.org/web/20170620120324/http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle&ID=232871&highlight= |archive-date=June 20, 2017 |url-status=dead }} Amazon, along with Hummer Winblad Venture Partners and Bowman Capital Management invested $10.5 million into Pets.com in March 1999.{{Cite news|url=https://www.marketwatch.com/story/sock-puppet-kills-petscom|title=Pets.com killed by sock puppet|last=Tarsala|first=Mike|work=MarketWatch|access-date=2018-06-22|language=en-US}}{{Cite web|url=https://www.thefreelibrary.com/Pets.com+Announces+Financing+From+Amazon.com+and+Hummer+Winblad...-a054235220|title=Pets.com Announces Financing From Amazon.com and Hummer Winblad Venture Partners. – Free Online Library|date=March 29, 1999|website=The Free Library from Farlex|access-date=2019-01-29}} The CEO of Pets.com, Julie Wainwright, said of Amazon's investment, "This is a marriage made in heaven". By October 2000, Amazon had a 30% stake in the company.{{Cite news|url=https://www.nytimes.com/2000/11/08/business/technology-petscom-sock-puppet-s-home-will-close.html|title=TECHNOLOGY; Pets.com, Sock Puppet's Home, Will Close|last=Abelson|first=Reed|access-date=2018-06-12|language=en}} Pets.com spent most of the venture funding on large warehouses and other shipment infrastructures, as well as purchasing their biggest online competitor at the time, Petstore.com in June 2000 for $10.6 million.{{Cite news|url=https://www.cnet.com/news/pets-com-to-buy-assets-of-rival-petstore-com/|title=Pets.com to buy assets of rival Petstore.com|date=2000-06-13|work=CNET|access-date=2018-06-06|language=en}}{{Cite book|title=How Venture Capital Works|last=K. Ryan|first=Peter}}

A regional advertising campaign using a variety of media began, which included television, radio, print, outdoor advertising and a Pets.com magazine, which had its first issue published in November 1999. The first issue was sent to 1 million pet owners in the United States during the month it was first published.{{Cite news|url=https://multichannelmerchant.com/marketing/pets-com-publishes-print-magazine/|title=Pets.com publishes print magazine – Multichannel Merchant|date=2000-06-01|work=Multichannel Merchant|access-date=2018-09-28|language=en-US}}{{Cite news|url=https://adage.com/article/news/pets-socks-competitors/1171/|title=Pets.com socks it to competitors|access-date=2018-09-28|language=en}}{{Cite book|title=The Complete Internet Marketer|last=Neuman|first=Jay}}{{Cite news|url=https://www.adweek.com/brand-marketing/iq-interactive-special-report-iq-qa-sock-dogma-40818/|title=IQ Interactive Special Report: IQ Q&A – Sock Dogma|access-date=2018-09-28|language=en-US}} Pets.com started with a five-city advertising campaign, which was expanded to 10 cities by Christmas 1999.{{Citation needed|date=October 2018}} The company succeeded in making its mascot, the Pets.com sock puppet, well known.{{Cite web|title=10 big dot.com flops – Pets.com (1) – CNNMoney.com|url=https://money.cnn.com/galleries/2010/technology/1003/gallery.dot_com_busts/|access-date=2021-02-08|website=money.cnn.com}}{{Cite web|last=Andrew Beattie|title=Why Did Pets.com Crash So Drastically?|url=https://www.investopedia.com/ask/answers/08/dotcom-pets-dot-com.asp|access-date=2021-02-08|website=Investopedia|language=en}} The Pets.com site design was extremely well-received, garnering several advertising awards.{{Citation needed|date=October 2018}} In January 2000, the company aired its first national commercial as a Super Bowl ad which cost the company $1.2 million.{{Cite web|url=https://money.cnn.com/magazines/business2/business2_archive/2007/03/01/8401031/?postversion=2007022807|title=For startups, failure can be a good thing – March 1, 2007|date=2007-03-03|access-date=2018-10-29|archive-url=https://web.archive.org/web/20070303063805/http://money.cnn.com/magazines/business2/business2_archive/2007/03/01/8401031/?postversion=2007022807|archive-date=March 3, 2007}} That ad was ranked #5 by USA Today's Ad Meter.{{Cite news|url=http://admeter.usatoday.com/2015/01/21/best-super-bowl-commercials-2000-budweiser-mountain-dew/|title=Watch 5 of the best Super Bowl commercials from 2000|date=2015-01-21|work=Ad Meter|access-date=2018-07-21|language=en-US}} The company went public on the NASDAQ stock exchange in February 2000 and raised $82.5 million; the former Nasdaq stock symbol was IPET.{{Cite news|url=https://www.cnet.com/news/pets-com-raises-82-5-million-in-ipo/|title=Pets.com raises $82.5 million in IPO|date=2000-02-10|work=CNET|access-date=2018-06-07|language=en}}

Despite its success in building brand recognition, it was uncertain whether a substantial market niche existed for Pets.com.{{cite book |url=https://books.google.com/books?id=mn_xucBVwzcC |title=Thinking Inside the Box: The 12 Timeless Rules for Managing a Successful Business |pages=30–32 |author=Kirk Cheyfitz |publisher=Simon & Schuster |year=2003 |access-date=2009-04-22 | isbn=978-0-7432-3575-4}} No independent market research preceded the launch of Pets.com. During its first fiscal year (February to September 1999), Pets.com earned $619,000 in revenue, and spent $11.8 million on advertising. Pets.com lacked a workable business plan and lost money on nearly every sale because, even before the cost of advertising, it was selling merchandise for approximately one-third the price it paid to obtain the products. Pets.com tried to build a customer base by offering discounts and free shipping, but it was impossible to turn a profit while absorbing the costs of shipping for heavy bags of cat litter and cans of pet food within a business field whose conventional profit margins are only two to four percent.{{cite book |url=https://books.google.com/books?id=6o7SrLdgx8gC|title= Brand failures: The Truth about the 100 Biggest Branding Mistakes of All Time |pages=188–191 |author=Matt Haig |publisher=Kogan Page Publishers |year=2005|access-date=2009-04-22 | isbn=978-0-7494-4433-4}} The company hoped to shift customers into higher-margin purchases, but customer purchasing patterns failed to change and during its second fiscal year the company continued to sell merchandise for approximately 27% less than cost, so the dramatic rise in sales during Pets.com's second fiscal year only hastened the firm's demise.

In September 2000, Pets.com opened a new customer service call center in Greenwood, Indiana and relocated the majority of its customer work force to Indiana in order to cut costs.{{Cite web|url=https://www.cnet.com/news/0-1007-200-2717582.html|title=CNET.com – News – E-Business – Pets.com moves part of litter to Midwest|date=2000-11-02|access-date=2018-08-29|archive-url=https://web.archive.org/web/20001102091508/https://www.cnet.com/news/0-1007-200-2717582.html|archive-date=November 2, 2000}} They aggressively undertook actions to sell the company. PetSmart offered less than the net cash value of the company, and Pets.com's board turned down that offer.{{Citation needed|date=October 2018}} The company announced on November 7, 2000{{Cite web|url=https://money.cnn.com/2000/11/07/technology/pets/|title=Pets.com goes out of business – Nov. 7, 2000|website=money.cnn.com|access-date=2018-07-26}} that they would cease taking orders on November 9, 2000 at 11am PST and laid off 255 of their 320 employees.{{Cite news|url=https://www.msnbc.com/msnbc-originals/watch/the-pets-com-phenomenon-789155395746|title=The Pets.com Phenomenon|work=NBC News|access-date=2018-05-21|language=en-US}}{{Cite news|url=https://www.wsj.com/articles/SB973617475136917228|title=Pets.com Will Shut Down, Citing Insufficient Funding|work=WSJ|access-date=2018-07-26|language=en-US}} Pets.com had around 570,000 customers before its shutdown.{{Cite news|url=https://www.marketwatch.com/story/sock-puppet-kills-petscom|title=Pets.com killed by sock puppet|last=Tarsala|first=Mike|work=MarketWatch|access-date=2018-06-06|language=en-US}} Pets.com stock had fallen from its IPO price of $11 per share in February 2000 to $0.19 the day of its liquidation announcement.{{Citation needed|date=October 2018}} At its peak, the company had 320 employees,{{Cite news|url=https://www.msnbc.com/msnbc-originals/watch/the-pets-com-phenomenon-789155395746|title=The Pets.com Phenomenon|work=NBC News|access-date=2018-06-27|language=en-US}} of which 250 were employed in the warehouses across the United States. While the offer from PetSmart was declined, some assets of Pets.com, including its domains, trademarks and subsidiaries such as Flying Fish Express, were sold to PetSmart in December 2000.{{Cite news|url=https://www.cnet.com/news/petsmart-com-snaps-up-rival-domain-name/|title=Petsmart.com snaps up rival domain name|date=2000-12-04|work=CNET|access-date=2018-06-18|language=en}}{{Cite news|url=https://www.zdnet.com/article/pets-com-sells-name-to-rival-petsmart/|title=Pets.com sells name to rival Petsmart|last=Grenier|first=Melinda|work=ZDNet|access-date=2018-09-30|language=en}}{{Cite news|url=https://www.ecommercetimes.com/story/5701.html|title=PetSmart.com Buys Pets.com Domain Name|access-date=2018-10-29|language=en}} As of 2025, the Pets.com domain redirects to PetSmart.com.{{Cite web|url=https://www.computerworld.com/article/2590029/petsmart-com-buys-url-of-former-rival-pets-com.html|title=Petsmart.com buys URL of former rival Pets.com|website=Computerworld|access-date=2021-09-24}}

Wainwright and nine other executives stayed during the liquidation and held a stockholders' meeting on January 16, 2001 to finalize the liquidation. Wainwright received $235,000 in severance on top of a $225,000 "retention payment" while overseeing the closure.{{Cite news|url=https://www.computerworld.com/article/2589870/retail-it/pets-com-to-finalize-liquidation-plans.html|title=Pets.com to finalize liquidation plans|last=Mearian|first=Lucas|date=2001-01-02|work=Computerworld|access-date=2018-07-18|language=en}} The company changed its name to IPET Holdings, Inc. on January 16, 2001 and liquidation of the company was completed on January 18.{{Cite web|url=https://www.sec.gov/Archives/edgar/data/1100683/000089161802001559/f80264e10-k.htm|title=IPET Holdings Form 10-K Period Ended 12/31/01|website=U.S. SEC|access-date=2019-04-26}}

During the company's existence, Pets.com partnered with Best Friends Animal Sanctuary to start a charity called "Pets.commitment", which provided funding and support for animal shelters, animal therapy, service dog programs, pet care and wellness organizations. The charity's motto was "people helping animals, animals helping people."{{Cite web|url=http://www.pets.com:80/commitment/bestfriend_letter.html|title=Pets.commitment: Pets.com is partnering with Best Friends Animal Sanctuary|date=2000-05-29|access-date=2018-07-26|archive-url=https://web.archive.org/web/20000529102043/http://www.pets.com/commitment/bestfriend_letter.html|archive-date=May 29, 2000|url-status=live}} After the Pets.com website closed in November 2000, Pets.com donated more than 21 tons of dog food to help Mushers in Alaska's Interior in December 2000.{{Cite news|url=https://www.cbsnews.com/news/defunct-petscom-donates-dog-food/|title=Defunct Pets.com Donates Dog Food|access-date=2018-09-30|language=en}}

File:Pets.com sockpuppet.jpg

Pets.com hired the San Francisco office of TBWA\Chiat\Day to design its advertising campaign. The firm had recently created the popular Taco Bell chihuahua. For Pets.com, it designed a doglike sock puppet that carried a microphone in its paw. The puppet, performed by Michael Ian Black (an alumnus of MTV's surrealist comedy sketch show The State), was a simple sock puppet with button eyes, flailing arms, a watch for a collar, and a stick microphone emblazoned with "pets.com".{{Cite web|url=https://cdnc.ucr.edu/cgi-bin/cdnc?a=d&d=OL20000127.2.39&srpos=1&e=-------en--20--1--txt-txIN-Pets.com-------1|title=Oak Leaf 27 January 2000 — California Digital Newspaper Collection|website=cdnc.ucr.edu|access-date=2018-06-12}} The sock puppet first appeared in Pets.com's advertising in August 1999.{{Cite web|url=https://money.cnn.com/2000/11/07/technology/pets/|title=Pets.com goes out of business - Nov. 7, 2000|website=money.cnn.com|access-date=2018-06-22}}

As the puppet's fame grew through 1999 and 2000, it gained almost cult status and widespread popularity. The puppet made an appearance on ABC's Good Morning America and Nightline, WABC-TV-produced Live with Regis and Kathie Lee, was interviewed in People Magazine, Time Magazine, Entertainment Weekly and Adweek and even had a {{convert|36|ft|m|adj=mid|-tall}} "falloon" made in its image for the 1999 Macy's Thanksgiving Day Parade.{{refn|{{Cite news|url=https://www.nytimes.com/2000/11/08/business/technology-petscom-sock-puppet-s-home-will-close.html|title=TECHNOLOGY; Pets.com, Sock Puppet's Home, Will Close|last=Abelson|first=Reed|access-date=2018-06-12|language=en}}{{Cite news|url=https://www.nytimes.com/2000/03/27/business/media-the-sock-puppet-that-roared-internet-synergy-or-a-conflict-of-interest.html|title=Media; The Sock Puppet That Roared: Internet Synergy or a Conflict of Interest?|last=Kaufman|first=Leslie|work=The New York Times |date=March 27, 2000 |access-date=2018-06-15|language=en}}{{Cite news|url=https://www.nytimes.com/1999/11/24/nyregion/and-now-a-balloon-from-our-sponsor.html|title=And Now, a Balloon From Our Sponsor|last=Eaton|first=Leslie|work=The New York Times |date=November 24, 1999 |access-date=2018-06-24|language=en}}{{Cite book|title=The Wisdom of Failure: How to Learn the Tough Leadership Lessons Without|last=G. Weinzimmer|first=Laurence}}}} In addition to the media appearances the Pets.com puppet made, merchandising was also done for the company including clothing, other trinkets, and a retail version of the sock puppet that delivered some of the puppet's famous lines, which started shipping on June 13, 2000.{{Cite web|url=https://money.cnn.com/2000/11/07/technology/pets/|title=Pets.com goes out of business - Nov. 7, 2000|website=money.cnn.com|access-date=2018-06-03}}{{Cite news|url=https://slate.com/business/2000/06/the-puppet-that-ate-a-dot-com.html|title=The Puppet That Ate a Dot-Com|work=Slate Magazine|access-date=2018-10-29|language=en}} More than 10,000 puppets had been sold in its first week of availability and more than 35,000 puppets had been sold by late-July 2000.{{Cite web|url=https://www.cnet.com/news/pets-coms-puppeteer-on-strike-against-ad-industry/|title=Pets.com's puppeteer on strike against ad industry|last=Olsen|first=Stefanie|date=July 26, 2000|website=CNET|language=en|access-date=2019-04-25}} The Pets.com sock puppet toy was available until the website's shutdown.{{Cite web|url=https://money.cnn.com/2000/11/07/technology/pets/|title=Pets.com goes out of business - Nov. 7, 2000|website=money.cnn.com|access-date=2018-06-03}} The Pets.com sock puppet also had an “autobiography” of himself titled "Me by Me", which was released in 2000, a coffee table book featuring a compilation of photos with quotes.{{Cite web|url=http://www.businessinsider.com/people/pets-com-sock-puppet|title=Pets.com Sock Puppet - Business Insider|website=Business Insider|date=2018-06-28|access-date=2018-10-29|archive-url=https://web.archive.org/web/20180628044126/http://www.businessinsider.com/people/pets-com-sock-puppet|archive-date=June 28, 2018}}{{Cite book|url=https://trove.nla.gov.au/version/218941983|title=Me by me : the pets.com sock puppet book|last=Asen|first=Ben|date=2000|publisher=New York, NY : Ibooks : Distributed by Simon & Schuster|isbn=1588243702|language=en}}

After Pets.com liquidated, Hakan and Associates and Bar None, Inc. purchased the rights to the puppet under a joint venture called Sock Puppet LLC for $125,000 in 2002.{{cite press release |title=Sock Puppet On Board With Bar None! |publisher=BarNone |date=2002-05-09 |url=http://www.barnone.com/sockpuppetrelease.htm |access-date=2009-02-24 |quote=Bar None and Hakan Enterprises, Inc., joined forces to secure the rights for the Sock Puppet – and they are excited to be able to give him a “second chance” in the advertising world. |url-status=dead |archive-url=https://web.archive.org/web/20020602084525/http://www.barnone.com/sockpuppetrelease.htm |archive-date=June 2, 2002 }}{{Cite news|url=https://www.latimes.com/archives/la-xpm-2002-jun-24-fi-sock24-story.html|title=Sock Puppet Finds a New Home|last=WATERCUTTER|first=ANGELA|date=2002-06-24|work=Los Angeles Times|access-date=2018-06-18|language=en-US|issn=0458-3035}} Bar None, Inc., an American automotive loan firm, gave the puppet a new slogan: "Everyone deserves a second chance." and aired nine commercials featuring the puppet in July 2002.{{Cite news|url=https://nypost.com/2002/06/19/2nd-act-for-pets-com-sock-puppet/|title=2ND ACT FOR PETS.COM SOCK PUPPET|date=2002-06-19|work=New York Post|access-date=2018-10-29|language=en-US}}{{Cite news|url=https://www.chicagotribune.com/news/ct-xpm-2002-06-24-0206240006-story.html|title=Sock puppet gets 2nd chance|work=chicagotribune.com|access-date=2023-07-30|language=en-US}}

As Pets.com's recognition began to grow, it attracted the attention of the creators of Triumph the Insult Comic Dog. Representatives from Robert Smigel sent letters, including a cease and desist demand, to Pets.com claiming that the puppet was based on Triumph. Pets.com responded by suing Smigel in the U.S. District Court in San Francisco in April 2000, demanding $20 million in damages for defamation and trade libel.[http://www.thesmokinggun.com/file/dirty-sock-streisands-stocks Information on Smigel's lawsuit at] The Smoking Gun{{Cite web|url=https://dks.library.kent.edu/cgi-bin/kentstate?a=d&d=dks20000427-01.2.15&txq=Pets.com#|title=Daily Kent Stater 27 April 2000 — Kent State University|website=dks.library.kent.edu|access-date=2018-06-12}}{{Cite news|url=http://articles.latimes.com/2000/may/04/news/mn-26524/2|title=This Legal Dogfight Is No Joke|last=BROWNFIELD|first=PAUL|date=2000-05-04|work=Los Angeles Times|access-date=2018-07-26|language=en-US|issn=0458-3035}}{{dead link|date=September 2024|bot=medic}}{{cbignore|bot=medic}}{{Cite news|url=https://nypost.com/2000/04/26/pets-com-poop-on-conans-puppet/|title=PETS.COM POOP$ ON CONAN'S 'PUP'PET|date=2000-04-26|work=New York Post|access-date=2018-08-11|language=en-US}}

Wainwright responded to the lawsuit, saying that "We were surprised when we received the letter because there is obviously no relation between the Pets.com Sock Puppet and Triumph".{{Cite web|url=https://www.thefreelibrary.com/Pets.com+Provides+Perspective+On+Lawsuit+With+Robert+Smigel%2C+Creator...-a061758051|title=Pets.com Provides Perspective On Lawsuit With Robert Smigel, Creator of Triumph, the Insult Comic Dog.|date=2000-04-27|website=The Free Library by Farlex|access-date=2019-01-29}} Canadian sock puppet character Ed the Sock, who had previously accused Smigel of basing his Triumph character on himself, also used the incident for publicity.

The lawsuit was dismissed in February 2001 by Judge Charles R. Breyer.{{Cite web|url=https://archive.org/details/gov.uscourts.cand.38967|title=Case docket: Pets.com Inc v. Smigel|website=ia802307.us.archive.org|access-date=2018-08-10}}

The publicity surrounding the Pets.com puppet, combined with the company's collapse, made it such a symbol of dot-com folly that E-Trade referred to it in an advertisement during the 2001 Super Bowl. The commercial, which parodies the famous crying Native public service advertisement from 1971, shows a chimpanzee riding on horseback through a ruined dot-com landscape. The chimpanzee comes across a company named "eSocks.com" that is being demolished and weeps when a discarded sock puppet lands at his feet.{{Cite news|url=https://www.cnet.com/news/2hrs2go-etrade-wins-ad-super-bowl/|title=2HRS2GO: E*Trade wins ad Super Bowl|date=January 2, 2002|work=CNET|access-date=2018-07-21|language=en}}{{Cite web|url=https://adage.com/videos/etrade-ghost-town/855|title=E-Trade - Ghost Town - Ad Age|website=adage.com|date=January 28, 2001|language=en|access-date=2018-10-29|archive-url=https://web.archive.org/web/20170205015051/https://adage.com/videos/etrade-ghost-town/855|archive-date=2017-02-05|url-status=live}}

In June 2008, CNET named Pets.com as one of the greatest dot-com disasters.{{cite web|url=http://crave.cnet.co.uk/0,39029477,49296926-8,00.htm|title=The greatest defunct Web sites and dotcom disasters|date=2008-06-05|publisher=CNET|archive-url=https://web.archive.org/web/20080607211851/http://crave.cnet.co.uk/0,39029477,49296926-8,00.htm |archive-date=2008-06-07|access-date=2008-06-05}}

Pets.com's concept was successfully realized by Chewy.com, prompting comparison between the two companies by analysts after Chewy held their IPO in 2019. Chewy's founder Ryan Cohen rejects comparisons to Pets.com, telling Yahoo in 2019, "That is an absolute crazy comparison. I think there’s really nothing in common between those two businesses."{{cite web|url=https://money.yahoo.com/chewy-founder-dont-compare-us-to-petscom-154110825.html|title=Chewy founder: Don't compare us to Pets.com|author=Alexis Christoforous|date=August 8, 2019|website=Yahoo|access-date=January 26, 2022}}

{{Reflist|2}}

• [http://pets.com/ Pets.com] (domain now owned by PetSmart)
• [https://www.nytimes.com/2000/11/08/business/technology-petscom-sock-puppet-s-home-will-close.html "Pets.com, Sock Puppet's Home, Will Close"] New York Times article
• [https://web.archive.org/web/20110602061356/http://www.internetretailer.com/2000/12/26/investors-put-pets-com-to-sleep-garden-com-wilts "Investors put Pets.com to sleep; Garden.com wilts"]—Internet Retailer via the Wayback Machine
• [https://web.archive.org/web/20070312035008/http://www.epinions.com/mags-review-2BB7-2E8B4FE-388CC08C-prod1 "Pets.com is extraordinary!"]—Epinions via the Wayback Machine
• [https://web.archive.org/web/20060630163944/http://www.infoworld.com/articles/hn/xml/01/01/03/010103hnpets.html "Pets.com to finalize liquidation plans"]—InfoWorld via the Wayback Machine

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