I’m going to guess that if you’re reading this, you’re not a regular user of Egreetings. But if you are, be aware: The e-card service is shuttering on February 12.

American Greetings, the company that owns Egreetings, hasn’t bothered to explain the service’s demise (two days before Valentine’s Day) beyond some cursory  posts on Twitter and Facebook. If you were one of Egreetings’ limited set of social media followers, you might not have seen this coming:

And normally we could leave this there. But: It’s a Saturday, and I’ve got the time, so I puttered around on the Google, and reminded myself that Egreetings was part of the head-scratching E-Card Bubble of the late ’90s, which was one of the highlights/lowlights of the Web 1.0 Bubble.

So, a quick flashback: At the end of 1999, Egreetings, which gave away free e-cards and hoped to make money on advertising, went public after losing $1.5 million on sales of $22 million over a nine-month period. One the day it IPO’d, Egreetings was valued at more than $350 million. If you poked around stock chat rooms you would find people who thought that sounded like a bargain.

Why? Because it was 1999! And more specifically, because a couple months earlier, Excite@Home (remember Excite@Home?) had bought BlueMountain Arts, another money-losing e-card company, for $780 million. And a big chunk of that was in actual cash.

So obviously, the logic went, somebody else would snap this baby up, too. After all, there was an e-cards gold rush going on.

And in fact, Egreetings was acquired. But not until the bubble had already popped, and it had laid off its CEO and a third of its staff.

In February 2001 American Greetings picked EGreetings for a deal that valued the company at $28 million. Meanwhile American Greetings had to take a $33 million charge for a writedown on the 20 percent of Egreetings it already owned.

And what about BlueMountain? American Greetings ended up buying that, too, a few months later. For $35 million.

American Greetings is still a viable business, though understandably a contracting one. In the 12 months that ended in February 2013, the company had eked out a profit of $50 million on $1.8 billion in sales.

Almost all of that money came from paper cards. But some advertisers, and nearly 4 million subscribers, are still paying for e-cards: American Greetings’ digital unit, which included Egreetings, generated $64 million in sales.

Last year American Greetings went private in a deal that valued it at $878 million. You can still spend money on BlueMountain cards. Prices start at $4 a month.




3 comments
weav
weav

Well that's a sad note.   I was a relatively early employee there, back in the days when it was still called Greet Street (hi, Fred!).  We evolved from printing and mailing paper greeting cards to all-digital, and had a lot of neat Shockwave/Flash-driven tech that was ahead of its time (now Flash is everywhere like bedbugs).  A lot of that never got out after Gibson and AmGreet took over.  Unfortunately the barrier to entry was pretty low and a lot of competition got in, and the business model may not ever have worked.  At least it beat shipping dog food by FedEx.

Alas, E-Greetings, we hardly knew ye.


f.campbell
f.campbell

Thanks for the condolences Peter. 

I was one of the co-founders and original CEO of Egreetings. Stanford GSB classmate, Tony Levitan and I co-founded Egreetings on the belief that the online world would be a better place if feelings and emotions could be easily expressed and understood. The year was 1993, and as you will recall, online communication came in one flavor: Ascii text. Emoticons helped convey personal intent and anger became CAPITAL letters. But clearly, human expression needed a richer palette, and this is what Egreetings helped bring to the online world.

Egreetings was blessed to attract an amazing group of incredibly talented individuals who took this simple idea and turned it into one of the world's most popular websites (I think we reached #22 largest website in the world). 

By early 1998, Tony and I were ready to hand Egreetings off to a new management team. It took us a year to find the right CEO, but we finally did, and in the late summer of 1999, Tony and I departed the company. The new CEO/President inherited a great team (75 strong), about $25 million cash in the bank, and an active registered customer base that exceeded 13 million.


As for the demise of Egreetings, I don't believe it was the burst of the internet bubble in 2000 that killed Egreetings (and other digital greeting companies). Rather online personal expressions evolved, but  Egreetings did not. 


Today, the online market for rich graphical personal expressions is vastly larger than it was in 1999, it just looks different. For example, numerous meme sites and photo sharing apps are among the world's most popular online/mobile activities. These services better fulfill the same basic need ... to help customers express themselves in the online world. The challenge for Egreetings was to evolve beyond the "greeting card" constraint. It did not, and it became irrelevant. 

I am sad to see Egreetings go, but proud to have been part of the journey.

All the best, Fred Campbell, co-founder Egreetings.



JoyDaniels
JoyDaniels

What are your thoughts regarding new online card companies such as Minted and Paperless Post? How are they faring?

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