Flooz.com
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Flooz.com was a dot-com era internet currency for online merchants. Users bought Flooz credits online, with each Flooz equal to one dollar, or earned them as promotional bonuses, then emailed them as gifts to recipients who could redeem them at participating online stores such as Barnes and Noble and Tower Records. The company was founded in New York by iVillage co-founder Robert Levitan and Spencer Waxman, and promoted with a lavish television ad campaign starring Whoopi Goldberg.
02 / Flooz.com FAILURE REASONS
Failure factors
Flooz blamed dramatic capital-market changes and economic slowdown and failed merger talks; credit-card fraud (~$300k stolen-card purchases) led processors to freeze funds, breaking cash flow while merchant payouts continued.
adversely affected by dramatic changes in capital markets and economic slowdown; merger talks failed.
Stolen-card purchases of flooz led processor to withhold reimbursements/freeze accounts, breaking cash flow.
03 / EVENT HISTORY
Events in the structured record
- Bankruptcy
closed and filed for bankruptcy; Wikipedia Flooz.com: announced closure 26 Aug 2001; ~325,000 creditors.
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
Flooz.com raised about $35 million in venture capital and spent $8 million on a Whoopi Goldberg television ad campaign.
- 02
In 2001 the FBI notified the company that a Russian-Filipino organized crime syndicate had used stolen credit cards to buy $300,000 worth of Flooz to launder money; fraudulent purchases reached 19 percent of consumer credit card transactions.
- 03
Flooz filed for Chapter 7 bankruptcy on August 26, 2001, listing about $14 million in liabilities and roughly 325,000 creditors; unused Flooz credits became worthless and nonrefundable.
- 04
No reliable loss figure with a clear subject, period and basis exists, so no loss amount is recorded.