Wine.com (1.0)
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Wine.com 1.0 — born as Virtual Vineyards, founded in 1994 by Robert Olson — was an early online wine retailer that became the largest wine seller on the Internet. It bought the wine.com domain for over 10 million dollars in 1999 and merged with Amazon-backed rival WineShopper.com in 2000. When the dot-com bubble burst and new cash dried up, the company collapsed in the spring of 2001; its assets, name and customer list were bought by rival eVineyard, which adopted the Wine.com name.
02 / Wine.com (1.0) FAILURE REASONS
Failure reasons
The dot-com crash destroyed the premise: after Wall Street's confidence in Internet retail faded, Wine.com could not raise additional cash, carried about 10 million dollars in debt, and faced creditors ready to foreclose. The 2000 merger with WineShopper had bloated the combined company to 400 people; two layoff rounds in early 2001 (75, then 160 of 245 staff) failed to save it. An academic study of the US wine industry puts total losses at 240 million dollars before the spring 2001 bankruptcy.
03 / EVENT HISTORY
Events in the structured record
- Company founded
Robert Olson founds Virtual Vineyards, an early online wine retailer.
- Acquisition
Virtual Vineyards, trading as Wine.com, merges with Amazon-backed WineShopper.com; the combined company has 400 staff and reports 30 million dollars in 2000 sales.
- Bankruptcy filing
After two rounds of layoffs and about 10 million dollars in debt, Wine.com goes bankrupt in spring 2001; creditor Sand Hill Capital transfers the assets to eVineyard.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Virtual Vineyards launches online wine retail; buys wine.com domain for $10M+
- 02
Merges with Amazon-backed WineShopper; 400 staff combined
- 03
Dot-com crash; no new cash; two layoff rounds in early 2001
- 04
Spring 2001 bankruptcy; eVineyard buys the name and customer list