The e-commerce shakeout claimed two fresh victims Tuesday as Netcentives, an online rewards and targeted marketing firm, and HealthCentral (Nasdaq: HCEN), the parent of Vitamins.com and WebRx.com, filed for bankruptcy.
San Francisco, California-based Netcentives said its Chapter 11 filing is part of a
"financial restructuring." Netcentives said it has found a buyer for its e-mail marketing 
unit and will put its patents, business operations and other assets up for auction.
Netcentives also said it has reached "a multimillion-dollar patent licensing agreement" with an unnamed "Internet media company." That deal enables the media firm to operate Netcentives' patented rewards program.
Early last year, America Online (NYSE: AOL) announced it had bought an undisclosed stake in Netcentives. Later in 2000, Netcentives rolled out a rewards program for AOL shoppers that granted frequent flier miles for online purchases.
Net Dis-Incentives
"The filing is an important step in protecting the value of our loyalty and e-mail business operations and the underlying intellectual property," Netcentives chief executive officer Eric Larsen said. "The asset auction is a continuation of a restructuring plan announced earlier this year."
The bankruptcy filing does not come as a total surprise. Last month, Netcentives was delisted from the Nasdaq exchange and promptly laid off about 50 workers.
In August, Netcentives announced a restructuring plan that included a nearly 50 percent workforce reduction and a plan to spin off some assets.
Vitamins Not Healthy
Less expected was the Chapter 11 filing from Emeryville, California-based HealthCentral, which announced its intention to file for bankruptcy protection in a one-paragraph statement.
The filing apparently covers all of HealthCentral's holdings, which include Vitamins.com, WebRx.com and HealthCentralRx.com.
All of the HealthCentral Web sites were operating Wednesday morning, though clearance
sales and discounts of up to 70 percent were being advertised throughout the network .
In August, HealthCentral reported that revenue had dropped during the second quarter compared to a year earlier, but that financial losses had been cut by 70 percent. At the time, HealthCentral said it had US$22 million in assets, but just $1.4 million in unrestricted cash.
Shakeout Redux
HealthCentral shares were trading Tuesday at 25 cents. At its peak, HealthCentral traded above the $100 level and at one point in January 2000, the shares were worth more than stock in Amazon.com (Nasdaq: AMZN).
The bankruptcy leaves Drugstore.com (Nasdaq: DSCM) as the pure-play leader in the category.
Drugstore.com has admitted, however, that it will not achieve profitability until sometime
in 2004.
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