The perception is that all Internet companies are sprinting, trying to capture a little bit of the magic that start-ups like eToys harnessed last holiday season. The Santa Monica, Calif.-based toy seller came out of 1998 with $23 million in sales and lots of momentum, which led to a gangbuster IPO in May. Following its example, companies like Send.com, which sells premium gift packages, are going full steam ahead with their ad blitzes. “For us the holiday season is an election,” says CEO Mike Lannon. “I don’t think you can bide your time.” The Waltham, Mass.-based start-up is peppering the radio and television airwaves with $20 million in spots–and it’s raised only $40 million from investors to date.
For some execs, that means waiting 12 long months until next Christmas. Ravi Gururaj, CEO of the Austin, Texas-based IveBeenGood.com, a gift registry that lets you pick out the goodies you want others to buy you, says he’s willing to lie low and let this holiday be a learning experience. “We don’t see much point in being the 20th dot-com ad that somebody sees in an hour,” he says. Instead he’s concentrating on building a network of partnerships with other Web sites. Forrester Research e-commerce analyst David Cooperstein says that entrepreneurs like Gururaj are betting on a quieter Christmas in 2000, when ad dollars might go further. “They’re hoping to see some of their competitors fall away. They want to be considered part of the next wave.”
Cooperstein also notes that new companies need the extra time to avoid the deadliest of holiday maladies: a crash-prone site and customer service that’s too overtaxed to service the customers. FamilyWonder, for example, has had to add millions in extra hardware and two customer-call centers in the past month, even with its restrained promotional campaign. Still, the company elected to turn away 10 percent of its customers in October. “We’d rather tell them we’re too busy right now than let them log on and have everything come to a halt,” Kaplan says.
Other companies this holiday season have their toes in the pool, testing the water. Like many Net start-ups hoping to stand out, luggage retailer eBags has lured a celebrity spokesman, Francis Ford Coppola. But in tests in a few local markets, CEO Jon Nordmark says that the 30-second TV spot didn’t perform much better than a radio ad. “I’m sure we’ll end up using it,” says Nordmark, “but it might be better to save it for next March, when there’s not so much dot-com activity.” His company is still spending on radio and print in a few major markets. But in terms of a huge TV ad campaign, it seems there’s little room between lying low and going for broke.
