The greatest defunct Web sites and dotcom disasters

By Nate Lanxon on 05 June 2008, 10:45am

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Webvan (1999-2001, precursor to Tesco.com, et al)

Thankfully, the UK didn't have its own version of Webvan -- it was one of the most epic fails in the dotcom bubble fiasco. It was a Web site that sold groceries such as bread and vegetables in the US, and was founded in 1999.

Within 18 months it had spent $1bn (over £500m at today's exchange rate) on a string of $30m futuristic warehouses, rapidly expanded into multiple US cities, raised almost half a billion dollars by going public and even bought out one of its largest rivals, HomeGrocer. By 2001, it announced its bankruptcy, firing 2,000 employees in the process.

Live faster, die younger
Webvan -- none of whose senior executives or investors had any experience in the supermarket trade -- went from being a $1.2bn company with 4,500 employees to being liquidated in under two years. High-profile investors in the store, including Sequoia Capital (which fortunately got it right with Apple, Google, Paypal and others), would have known trouble was in store for their investment when they saw Webvan's stock plummet from its all-time high of $30 to just six cents within a few months.

"One of the hallmarks of the dot-com crush has been the presumption that you needed to get big fast, which worked for Amazon.com and virtually no one else," commented Gartner analyst Whit Andrews in an interview with CNET.co.uk's sister site News.com at the time of Webvan's bankruptcy.

The site exists now as merely a traditional link farm, a relic of one of 2001's most enormous financial implosions, which all binary entrepreneurs should be familar with. If nothing else it can stand as a cautionary example of how not to start your Web business.

(Image credit: Lindsey Turrentine, CNET.com)