Save.com Closes After Valassis, Others Pull Funding
Valassis, Livonia, MI, which has held a more than 50 percent stake in Save.com, pulled funding because Save.com was unable to gain a "critical mass of advertisers interested in an Internet couponing vehicle," according to Valassis.
"The current advertising industry recession, combined with the decline of so many Internet investments, has caused a general skepticism about Internet advertising," Alan F. Schultz, chairman, CEO and president of Valassis, said in a statement.
Save.com, Culver City, CA, launched in September 1999 and claimed to be one of the first programs that allowed users to print at home online coupons from packaged-goods marketers. It joins coupon-category casualties like e-save.com and OneClip.com.
In a statement, Save.com CEO Suzie Brown said her company was "unable to raise the capital required to sustain us for a long period enough to gain the content we needed to reach profitability."
Claiming that while coupon redemption rates were strong and users were comfortable with printing at home, "we couldn't get to critical mass quickly enough," Brown said.
Valassis will take a third-quarter charge for the shutdown and reassign employees it sent to work at Save.com. It will continue its involvement with online couponing through a small investment with Coupons Inc., Palo Alto, CA.
Coupons Inc. claims its Web technology allows secure printing of coupons and other digital certificates for businesses and consumers. These certificates can be printed at home for in-store redemption or redeemed electronically when shopping online.
Coupons Inc. announced a partnership Aug. 14 with News Corp.-owned News America Marketing's SmartSource iGroup. Coupons Inc.'s Web-printable coupons technology will be used to distribute consumer promotions across the SmartSource Savings Network. Formed recently, the SmartSource network comprises SmartSource.com and Coupons Inc.'s Coupons.com and other sites, banner advertisements and e-mail efforts.
Though the online coupons market is tough, players like Coolsavings.com, Ebates.com and 1800Discounts.com still survive. But even Coolsavings reported a net loss of $6.4 million on sales of $5.3 million for the second quarter.
Another marketer, DirectStuff.com, Pittsburgh, sold MyCoupons.com and DirectCoupons.com to Save.com in May 2000. The two-year cash and marketing agreement was valued at $23 million. Both sites were to be managed by DirectStuff.com.
Coupons Inc. president/CEO Steven R. Boal said Save.com's failure could not be blamed simply on lack of funding or an insufficient number of advertisers.
"The online couponing model is one that must rival the offline world in that you need distribution," he said. "Building a destination and helping people land there to print coupons is not the way to address the market."