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Wine.com raises $12 million more -- to try seventh time lucky

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Wine.com has become the most stubborn dot.com hangover ever.

The San Francisco online wine retailer, which depending on how you count is now on around its seventh reincarnation since launching in the 1990s, will announce tomorrow that it has raised $12 million in new venture capital from New York-based Baker Capital.

The company has appointed Rich Bergsund as chief executive and a member of the board of directors. We will now stop counting how many different CEOs there have been, and we've lost count of the amount of venture capital wasted on this unprofitable company (it is somewhere around $200 million).

Wine.com became a victim of the dot-com hubris, when venture capitalists invested more than $100 million into the company even though it didn't have a clear business model. Subsequent efforts have failed, with each management team arriving to implement the management mantra of the day. Circa 2002, the team said it would focus on only those areas -- such as gifts and wine club activities -- that make money. Things began to stabilize under Chairman Chris Kitze, but then all hell broke loose when investors apparently declined an acquisition offer.

In February, Kitze and twelve other investors filed suit against Baker saying they were cheated out of up to $30 million.

That suit is still alive, and you will see here that Baker's latest investments have watered things down so much that there are 45 billion shares. And this is a private company which, at least according to Bergsund, has never been profitable.

Bergsund was most recently foundner and chief executive of IdeaForest, an online retailer of hobby and crafts. He declined to comment on the legal matters, and Baker Capital wasn't available for comment.

Bergsund he said he'll be targeting visitors to the site with the latest marketing techniques, analyzing clickstream data, for example. Wine.com will study where visitors come from, what wine pages they click on, and so on, to generate a view of what sort of wines they are likely to buy. Wine will then match them with wines in Wine.com' database

This Bergsund is a brave man.

"Rich has a strong track record turning around businesses and driving them to positions of leadership, profit and growth,'' said Baker general partner Rob Manning in a statement.

Rick, we are drinking a "good luck" toast to you as we write. May the curse be broken!


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Comments

Go Cork'd!

Mike Rundle on June 21, 2006 10:29 PM
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Why does Wine.com need so much money? Is it for advertising? If so, are they really going to build their brand to the point where they can be profitable?

Seriously, when and how might they be profitable? Does anyone know?

Ridolph on June 21, 2006 11:14 PM
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It is amazing to watch this company wallow into raisins. They had a legit offer from a large retailer and they crapped the bed.

This is a story of terrible leadership from the top, and I don't mean the CEO level. The investors did this to themselves; they deserve every diluted worthless share they have.

Jim L on June 22, 2006 5:06 AM
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Bergsund has a big chance to become the first successful and profitable wine.com CEO. Their strength is the brand, their weakness is their lack of focus.
Nobody needs the biggest wine choice in the world, unless you are a wine compendium. Wine.com is an online wine store and needs to focus on the advantages the net provides: focused recommendations, browsing options and a lean and easy to use shopping process. focus, focus, focus!
Good luck from Switzerland, where romazini.com is a profitable online wine retailer.

Benjamin Gilgen on June 22, 2006 7:50 AM
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The original claim to fame of on-line sellers was that their lack of bricks and mortar would enable lower prices. Not only are Wine.com's prices for many bottles higher than that found in most parts of the country but after adding shipping, the cost to purchase through them is prohibitive.

Tim on June 22, 2006 8:28 AM
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Isn't there a deadline at year's end that companies will have to properly expense stock options? A lot of these startups, where options are handed out like toilet paper, are going to have some explaining to do.

Mr. K. on June 22, 2006 3:34 PM
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While Wine.com keeps re-licking their wounds each go-around, pissing away new investment, stabilization or re-capitalization funds, dozens of other online wine retailers are making a go of their companies with much smaller business models...I don't get it?

Dan T on June 25, 2006 5:20 AM
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