RealTime IT News

Backers Pull Plug on Brandwise.com

"Thank you for visiting," says the Brandwise.com home page. "The Brandwise Web site is currently under transition."

Apparently, that's the latest code for "no more funding," as the comparison-shopping site yesterday became the latest victim in the ongoing dot-com shake out.

Kathy Misunas, Brandwise.com's chief executive officer, said investors, which include Hearst Corp., Whirlpool and Boston Consulting Group, decided not to continue investing in the operation, which launched last fall. The former AMR executive told atNewYork.com that a team would decide within a couple months, or even sooner, whether to sell the start-up outright or find new investment possibilities in the business-to-business space.

"The cost of customer acquisition just became too high relative to near-term profitability and the cost to run the business," she said. But Misunas said she remains a believer e-commerce plays. "This concept, I believe, is going to end up successful in the future," she said, "or I wouldn't have come here to begin with," said Misunas, who also helped launch Travelocity.

Clearly, timing was not on the site's side when it launched last October as venture capitalists and the markets' interest in consumer-related e-commerce plays were cooling.

And when Brandwise did launch, its business plan - to rate appliances based on lab test performances and then sell those appliances online -- was viewed as an ambitious Internet play for to grab some of the turf long-owned by Consumer Reports magazine. But it was also seen as rife with the potential for conflicts of interests since. With a major appliance manufacturer like Whirlpool backing the start-up, Brandwise had to struggle with an albatross about its objectivity.

Misunas said the Whirlpool investment was a non-issue as soon as the site went up. "It was visible for all the world to see, that Whirlpool was handled like everybody else. It was literally a non-event."

More than any other factor, sales and marketing costs were the problems. By late fall, the cost of acquiring a customer had ballooned to as high as $300 or more - with scant opportunities to make that back on the business model.

As most of the company's employees went about the grim task of packing up their desks today, Misunas said she and the remaining 7 or 8 staff are keeping their options open on what to do.

"A lot of the existing business customers and portals are calling in and seeing if our database is still licensable or for sale," Misunas said. "We're entertaining those calls." And opening up lots of e-mails from colleagues providing all kinds of advice. "Here's one that says 'experience is what you get when you don't get what you want."