December 26, 2000, 9:55 AM

With offline sales flat, greeting card companies see the Internet boom as occasion for growth

(Page 2 of 2)

Booming in Boulder

Anything but traditional, Blue Mountain Arts continues to confound conventional wisdom on how a big player should look and act. The company, founded in Boulder, Colo., 28 years ago by Stephen and Susan Polis Schutz, publishes poetry books, all-occasion greeting cards and related products. Blue Mountain has maintained its counter-cultural roots on the Web by offering its animated and musical greeting cards free, as a so-called public service. Bluemountain.com, launched in 1996, took the position that the way to the hearts of people using a technology barely out of its cult phase was to become a cult phenomenon. With barely 1% of the paper greeting card market, it was a fortuitous move. The site, reminiscent of a mom-and-pop notions store on the funky side of town, was an instant hit. And on the Internet, hits are the name of the game. By last September, Bluemountain.com was the 14th most-trafficked Web site according to Media Metrix, with up to nine million unique visitors per month. In the Web’s early days, browsers expected things to be free and the Schutzes’ soft sell worked like a charm. Now, with e-commerce becoming increasingly competitive, it’s decision time for Blue Mountain. Resolutely opposed to charging for their e-cards, the Schutzes first began selling banner ads from a select retailers such as Barnes & Noble. Then in October, Internet portal Excite@Home bought Blue Mountain’s online division in a cash and stock deal valued at a whopping $780 million. The purchase allowed Excite@Home to increase its audience by as much as 34%, while the benefits for Blue Mountain include increased ad revenue through higher rates. “We dominate the category by fundamentally offering a better value,” says Jared Schutz, 23-year-old son of the company’s founders and the site’s executive director. He estimates that Blue Mountain has 70% of the e-greeting market. “By creating an exciting new Internet business,” he says, “we intend to build up the traffic over the next several years. We’re engaged in a constant innovative process to ensure that we continue to offer a high quality relationship with our users.” Despite their differences, the e-greeting contenders all offer a variety of high-quality cards featuring graphics, animation, and sound. The cards arrive as links to a special Web site. American Greetings and Hallmark both offer free cards along with the ones they sell, though generally at prices substantially below those of print cards. All three companies plan eventually to make their Web sites both entryways into new commerce as well as guideposts to traditional outlets. In the end, an industry dominated by impulse and emotion is well-situated to capitalize on the oddly intimate experience of giving and receiving e-mail. Just who, in six months, deserves a congratulatory note or a condolence card remains to be seen.

William Cocke is a freelance writer in Charlottesville, Va.

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