I’m going to guess that if you’re reading this, you’re not a regular user of Egreetings. But if you are, be aware: The e-card service is shuttering on February 12.
Our Condolences: Dot-Com Veteran Egreetings Folds Up
Which gives us a good excuse for a Brief History of the Web Bubble.
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
American Greetings, the company that owns Egreetings, hasn’t bothered to explain the service’s demise (two days before Valentine’s Day) beyond some cursory posts on Twitter and Facebook. If you were one of Egreetings’ limited set of social media followers, you might not have seen this coming:
https://twitter.com/egreetings/status/418014361022894080
And normally we could leave this there. But: It’s a Saturday, and I’ve got the time, so I puttered around on the Google, and reminded myself that Egreetings was part of the head-scratching E-Card Bubble of the late ’90s, which was one of the highlights/lowlights of the Web 1.0 Bubble.
So, a quick flashback: At the end of 1999, Egreetings, which gave away free e-cards and hoped to make money on advertising, went public after losing $1.5 million on sales of $22 million over a nine-month period. One the day it IPO’d, Egreetings was valued at more than $350 million. If you poked around stock chat rooms you would find people who thought that sounded like a bargain.
Why? Because it was 1999! And more specifically, because a couple months earlier, Excite@Home (remember Excite@Home?) had bought BlueMountain Arts, another money-losing e-card company, for $780 million. And a big chunk of that was in actual cash.
So obviously, the logic went, somebody else would snap this baby up, too. After all, there was an e-cards gold rush going on.
And in fact, Egreetings was acquired. But not until the bubble had already popped, and it had laid off its CEO and a third of its staff.
In February 2001 American Greetings picked EGreetings for a deal that valued the company at $28 million. Meanwhile American Greetings had to take a $33 million charge for a writedown on the 20 percent of Egreetings it already owned.
And what about BlueMountain? American Greetings ended up buying that, too, a few months later. For $35 million.
American Greetings is still a viable business, though understandably a contracting one. In the 12 months that ended in February 2013, the company had eked out a profit of $50 million on $1.8 billion in sales.
Almost all of that money came from paper cards. But some advertisers, and nearly 4 million subscribers, are still paying for e-cards: American Greetings’ digital unit, which included Egreetings, generated $64 million in sales.
Last year American Greetings went private in a deal that valued it at $878 million. You can still spend money on BlueMountain cards. Prices start at $4 a month.
This article originally appeared on Recode.net.
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