Closes After Valassis, Others Pull Funding

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Print-at-home coupon site has ceased operations, after its largest shareholder, Valassis Communications Inc., and other investors pulled out of the venture.

Valassis, Livonia, MI, which has held a more than 50 percent stake in, pulled funding because 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., 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 and

In a statement, 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 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 and Coupons Inc.'s and other sites, banner advertisements and e-mail efforts.

Though the online coupons market is tough, players like, and 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,, Pittsburgh, sold and to in May 2000. The two-year cash and marketing agreement was valued at $23 million. Both sites were to be managed by

Coupons Inc. president/CEO Steven R. Boal said'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."


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