to Outpost: We're Still Here

Share this article: is none too happy with an ad campaign by competitor that seems to suggest has gone out of business.

The campaign debuted three days before said in a Securities and Exchange Commission filing that it may go out of business.

A button, which began appearing on's home page on Aug. 16, asked, "Were you an egghead or customer? You may be able to get free shipping."

Clicking through the ad led to an offer for "former Egghead or" customers.

The ads have also appeared as banners at a few price comparison sites.

Egghead is shutting down., however, plans to be up-and-running for at least another year after recently receiving additional funds from founder Scott Blum.

Prior to the funding, the company disclosed in a SEC filing on Aug. 19 that it might shut down this month due to financial problems it had with its credit card processing provider.

"We are still in business -- period," said Kathy Beaman, spokeswoman for the Aliso Viejo, CA-based electronics retailer. "Let's put it this way: We know exactly what Outpost is insinuating."'s CEO Robert Price did not return repeated calls for comment.

Meanwhile, Outpost claims it has acquired hundreds of new customers as a result of the ads.

Jodie Brandolini-Fletter, director of public relations at Outpost, Kent, CT, said her firm did not attempt to mislead viewers into thinking had gone under. But in an interview a day earlier, she suggested that's recent problems likely had something to do with the way the copy was written.

"Both Egghead and are competitors of ours, and we know that there may be some fear out there with consumers about their financial situations or whatnot," she said. "We are trying to take advantage of that."

When asked about the timing of the ads, Brandolini-Fletter did not directly answer the question. "Look, we know they're still in business," she said.

While Outpost's ads may be misleading, they're not necessarily false advertising from a legal standpoint, said Marc Roth, Internet lawyer for the New York firm Brown, Raysman, Millstein, Felder & Steiner.

"The jury or judge would have to decide if the message was powerful enough to inaccurately make the viewers believe that was out of business," he said.

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