Cyberian Outpost, Inc.
IndustryE-commerce
Founded1995 (1995)[1]
FounderDarryl Peck
Defunct2001 (2001)
FateAcquired
SuccessorFry's Electronics
HeadquartersKent, Connecticut
ProductsComputer hardware & software
RevenueIncrease $355 million (2001)[1]
Number of employees
300[2]

Cyberian Outpost was an online vendor of discount computer hardware and software that operated the website outpost.com. After its IPO in 1998, it reached a peak market capitalization of $1 billion, but, after the bursting of the dot-com bubble, its stock price fell rapidly and the company was acquired by Fry's Electronics in 2001 for $21 million.[3]

The company received publicity for its controversial advertisements including one in which gerbils were shot out of a cannon, one where wolves attack a high school marching band, and one where children in daycare are being tattooed with "outpost.com" on their foreheads.

History

Cyberian Outpost was founded in 1995 by Darryl Peck.[1]

Cyberian Outpost was one of the earliest successful online-only retailers. Unlike many large retailers of the time, the company marketed directly to expert consumers instead of businesses and specialized in hard-to-find Macintosh products in a market saturated with Microsoft-compatible products. Outpost.com marketed its products around the world and offered its website in 11 languages and sold to customers in 140 countries.[4][5]

The company expanded rapidly, taking advantage of the booming Internet. Revenue increased from $1.9 million in the year ended February 29, 1996 to $22.7 million in the year ended February 28, 1998.[5]

In 1997, Money Magazine rated the site as "Best Site for Computer Equipment".[4][5] Outpost.com raised $2.7 million in venture capital in 1997, at which point the site had 25,000 visitors per day and 1.3 million customers.[2] The company secured another $22 million in financing in 1998, and raised another $70 million from its initial public offering.[2] Outpost.com opened a warehouse in Ohio that could guarantee next-morning domestic delivery and worldwide delivery within 48 hours.[4] Outpost provided next-day shipping on all orders, regardless of size, up until 2001.

After the dot-com bubble burst, the company fell on hard times. In 2001, the company entered into a merger agreement with PC Connection but then terminated that merger agreement and the company was sold to Fry's Electronics for $21 million including the repayment of $13 million in debt from PC Connection.[6][7][8][1][9] At that time, the company had 1.4 million customers and 4 million visitors per month to its website.[1]

Marketing

Outpost.com forged marketing partnerships with major Internet portals, such as AOL, CNet, and Lycos[10] in which Outpost.com was featured on these websites.[5]

Outpost.com hired Cliff Freeman to produce TV ads. His agency had created the "Pizza Pizza" campaign for Little Caesars and the "Where's the Beef?" campaigns for Wendy's International.[4][11] Outpost.com adopted a zealous and controversial marketing program which included a Super Bowl ad in which fake gerbils were shot out of a cannon at the company logo,[12] followed later by an ad that featured a high school marching band being attacked by a pack of ravenous wolves,[13] and another ad portraying pre-school toddlers being tattooed with 'Outpost.com' across their foreheads.[14]

References

  1. 1 2 3 4 5 "CYBERIAN OUTPOST INC FORM 8-K" (PDF). U.S. Securities and Exchange Commission.
  2. 1 2 3 Boughton, Kathryn (March 19, 2013). "Kent School alum purchases former 'Outpost.com' building for school use". New Haven Register.
  3. ↑ FLYNN, LAURIE J. (July 24, 2001). "As Cyberian Outpost plunges toward the abyss, two suitors wait patiently to pick up the pieces". The New York Times.
  4. 1 2 3 4 Parry, Mark E. (October 21, 2008). "Cyberian Outpost". SSRN 910080.
  5. 1 2 3 4 "CYBERIAN OUTPOST, INC. Form S-1".
  6. ↑ "Fry's Electronics, Inc. to Acquire Cyberian Outpost, Inc". MacWorld. September 4, 2001.
  7. ↑ "Fry's Bids $22.2 Million for Cyberian Outpost". MacWorld. Bloomberg News. July 10, 2001.
  8. ↑ "Termination Agreement - Cyberian Outpost Inc., PC Connection Inc., Merrimack Services Corp and Fry's Electronics Inc" (Press release). September 4, 2001.
  9. ↑ "Outpost.com Announces Completion of its Merger with Fry's Electronics" (Press release). PR Newswire. November 8, 2001.
  10. ↑ "Agreement - Lycos-Bertelsmann GmbH. and Cyberian Outpost Inc".
  11. ↑ Patel, Kunur (November 2, 2009). "Where's the Shop? Cliff Freeman Slips Into History Books". Advertising Age.
  12. ↑ Gerbils shot out of a cannon – via YouTube.
  13. ↑ Wolves attack a high school marching band – via YouTube.
  14. ↑ Children in Daycare being tattooed with "outpost.com" on their foreheads – via YouTube.
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