Forty-six days after a flashy dot-com launch party, a well-heeled Web site for teen-age girls unlaunched, took down its Web site, shut the doors of its flagship store and returned the leftover capital to investors.
Redwood City-based Kibu.com officially called it quits Monday and blamed bad market timing for its demise. Netscape co-founder Jim Clark and several other high-profile investors poured $22 million into Kibu to get it off the ground.
Now Kibu has been grounded.
"The management and investors considered the options in light of the lack of interest in (business-to-consumer) companies with advertising based business models," said Judy MacDonald, Kibu's CEO.
"Their conclusion was that even if the company could achieve significant market penetration, it would not be valued appropriately."
Try explaining B2C market penetration to teen girls who attended the "Glamfest" launch party in San Francisco at the company's upscale Ghiaradelli Square location.
Amid blaring deejay music, crudite platters and makeup tips, dozens of young girls squealed with delight at the thought of a Web site tailor-made to focus on their interests: fashion, music and boys.
There's money to be made from children surfing the Internet, but the traditional e-commerce advertising model employed by many companies like Kibu are not always well thought out, said Peter Grunwald.
His research and consulting firm, Grunwald Associates, specializes in children's online industries.
"It's pretty clear that there have been a number of overfunded and under thought out initiatives in the kids and teens market," Grunwald said.
Many companies targeting the teen demographic online failed to do enough research on the market, he said.
Kibu employees didn't waste any time moving on after the announcement, posting their resumes on a new Web site, Kibupeople.com.
Despite Kibu's failure, the Grunwald's research from a June survey found more than 25 million children ages 2-17 in the United States are on the Internet, up from 8 million in 1997.