This was posted as a "Story Stock" from Briefing.com
Webvan (WBVN) 1 3/32 +1/16: Given the competitive landscape these days, an Internet company can ill-afford to run an ad that doesn't give consumers a clear idea of what it does and how its services can benefit them. By and large, Webvan has done a good job of conveying its message, but the online grocery retailer goofed yesterday in announcing its latest promotion. It was November 16, the closing bell had already rung on Wall Street, and out comes Webvan with the following announcement on Business Wire at 5:12 pm: when a customer takes delivery of a Webvan order of $115 or more between November 1 and November 17, they will receive a $50 gift certificate from Ashford.com (ASFD 2)... Hmmm... Maybe it's just us, but don't you think this announcement would have had more impact if, say, it was made in late-October as opposed to the day before the offer expires? When we got here this morning, we can't say that we were surprised to see that a second press release from Webvan hit Business Wire at 8:16pm. That one said that due to customer demand, Webvan was extending its holiday promotion with Ashford.com for customers in Sacramento, Atlanta, Chicago and the San Francisco Bay Area through Friday, November 24, and that the offer was going to be made in the Dallas/Fort Worth, Orange County (CA), Portland (OR), San Diego, Seattle and Los Angeles markets to customers who take deliveries between November 22 and November 30. So, if we understand this correctly, in just three hours, customer demand hit such a crescendo that Webvan knew it just had to extend the offer. What strikes us as being more likely is that Webvan's PR department realized how inane the timing of the original promotion was. We point this out because we think it contributes to a growing list of reasons why investors have soured on Webvan's prospects. It's a petty complaint, but for a company that cannot assure its shareholders that it will achieve, or sustain, revenue growth or profitability, it is worth noting because it conveys a sense that Webvan is not as focused as it needs to be-- and that's not a good thing for a company which, most likely, will have to raise additional capital after June 30 to fund its operations and capital expenditures in a manner consistent with its growth objectives. With its stock down 93% year-to-date, there isn't much more room for error.-- Patrick J. O'Hare, Briefing.com |
