Buy.Com inc - Initial Reactions Were Skeptical, Expansion, Customer Complaints Marked First Year, Ipo Raised $182 Million In 2000

Buy.com 's tagline says it all: "The Internet Superstore—Low Prices on Top Brands." Launched in November 1998, Buy.com claimed to offer the lowest prices on the Web for a wide range of consumer goods, which it offered through specialty stores devoted to such categories as computers, software, office products, wireless products, electronics, books, videos, games, music, and sports. The company's prices were so low, in fact, that Buy.com 's business model was not designed to make money on its margins the way traditional retailers have done, but to generate a profit by selling advertising on its Web site. By selling merchandise at, near, or even below cost, Buy.com hoped to attract enough eyeballs to make consumer goods manufacturers want to advertise on its Web site. It was a revolutionary business model, and one that founder Scott Blum hoped would make Buy.com the fastest-growing company in U.S. history.