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.”

News Around the Web