In its second-largest acquisition, Amazon buys the company for $970 million.
A lot of dot-com competitors have been watching Webvan Group Inc. to see how the company will handle the complex logistical integration made necessary when Webvan bought HomeGrocer.com on Sept. 5. Many are expecting that how Webvan solves its problems may set standards for the industry. Today, Webvan announced that it expects to complete its transition to a common technology platform in the second quarter of 2001. Webvan stated that its focus through the first half of 2001 will be on:
--The completion of its integration with HomeGrocer.com, including the move to a common technology platform and a single identity under the Webvan brand;
--A steadfast concentration on profitability goals in its existing markets across the United States; and
--The conservation of working capital and the close monitoring of its cash burn rate.
"With Webvan's recent merger with HomeGrocer, we have more than doubled our market reach and have become the only Internet pure player in the 'Last Mile' category," George T. Shaheen, president and CEO of Webvan Group Inc., said in a prepared statement. "For the near term, Webvan's energies will be directed toward our integration into a single brand operating with a common technology platform. Our goal is--and will remain--to provide our customers with the ultimate shopping experience. We are committed to bringing out the best in both companies and will dedicate our resources to fully unify our organization by the second quarter of next year."
In light of the priorities cited today, the company said it has rescheduled to the second half of 2001 the expected commercial launch of webvan.com in the Baltimore-Washington, D.C., and Bergen County, NJ markets. The company had previously announced that it expected to begin service in these areas in the fourth quarter of 2000. The company also stated that the transition from its facility in Renton, WA, to its facility in Kent, WA, would occur in the second quarter of 2001 rather than in the first quarter of 2001 as previously announced.
Shaheen added, "We believe that by focusing our key resources on bringing our existing operations to profitability, we will be in a better position to significantly reduce the capital needed to drive our business in 2001. Webvan expects to continue its national growth strategy, including future commercial launches on the East Coast and across the nation."
Webvan currently serves markets in Atlanta, Chicago, Dallas/Fort Worth, Orange County (CA), Portland (OR), Sacramento, San Diego, the San Francisco Bay Area, Seattle, and Los Angeles -- reaching more than 20 million households with a market size of approximately $110 billion. WebVan operates the sites http://www.webvan.com and http://www.homegrocer.com.