By Robert Conlin E-Commerce Times
02/21/01 2:40 PM PT
Despite the influx of capital, HomeGrocer is fighting
increased competition from Webvan and others, as well as
the reluctance of many online shoppers to have
someone else select their food.
Originally published on February 22, 2000 and brought to you today as a time capsule.
Internet grocer HomeGrocer.com has announced that it will pay US$60 million
over five years to America Online (NYSE: AOL) for positioning across the
online giant's vast network.
As part of the arrangement, the Kirkland, Washington-based HomeGrocer
will be featured on AOL.com, Netscape Netcenter, Digital City, AOL MovieFone
and Oxygen.com.
Backed by Amazon.com (Nasdaq: AMZN) and a host of venture capital firms,
HomeGrocer considers its alliance with AOL to be crucial to increasing both
its visibility and its revenues as it prepares for an upcoming initial public
offering.
HomeGrocer filed registration papers with the U.S. Securities and
Exchange Commission (SEC) in December.
Expansion Planned
HomeGrocer was launched in 1998 in its home market of Seattle,
Washington and has since expanded its delivery service to Portland,
Oregon, Orange County, California and the Los Angeles area. It recently
completed a 114,000-square-foot facility in Southern California to facilitate
its expanded service in the Los Angeles metropolitan area.
The company is preparing to expand across the United States in the next year,
targeting metropolitan areas like New York City; the Bay Area in Northern
California; Dallas, Texas; San Diego, California; Washington, D.C. and Atlanta, Georgia.
HomeGrocer customers can order from a wide range of goods as late as 11 p.m.
for next day delivery. It offers free delivery for the first order or
for orders of $75 and above.
Like competitors Webvan, Peapod, HomeRuns and others, the company is fighting
increased competition and the reluctance of many online shoppers to have
someone else select their food.
Billion Dollar Potential
Still, many analysts say that the industry has the potential to generate
billions of dollars in revenues down the road. HomeGrocer.com also has
an advantage of being backed by Amazon.com as it gears up for a costly
fight for online grocery supremacy.
Last May, Amazon invested $42.5 million for a 35 percent stake in the company.
The AOL position will help drive up HomeGrocer's numbers. AOL has a captive
audience of some 25 million users and is widely recognized as being one of
the cornerstones of Internet commerce.
Webvan Pledges Cost-Cutting Measures January 25, 2001
Webvan said it has indefinitely delayed planned launches in Maryland, Washington, D.C. and New Jersey to focus on existing markets.
Webvan Issues Mixed Q4 Warning January 09, 2001
Webvan said that its focus on customer retention led to a 10 percent increase in average order size, from $102 in the third quarter to $112 in the fourth.
One Year Ago: Report: UK E-Commerce Set To Explode May 04, 2001
While lagging behind the United States in a number of key areas,
the European Internet has the built-in advantage of a sophisticated
wireless device market.
One Year Ago: X.com Marks the Spot for VC Funding April 05, 2001
X.com merged with e-mail payment service PayPal.com last month.
Combined, the companies accept payment for nearly a half a million
items on eBay (Nasdaq: EBAY).
One Year Ago: Priceline Reports Q4 Loss January 08, 2001
With airline tickets leading the way for Priceline, the company
sold over 700,000 tickets in the quarter, up 12 percent over third quarter figures.
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