Woot, There It Is

Plus: News Blackout; Skys the Limit

Woot, There It Is
From fancy watches to the “Bag O’ Crap,” woot.com sells itself to rabid consumers—one item a day
Every night, one minute before midnight, they hunch over their computers, this crazed lot of 10,000 from across the world, hoping to be the first to buy the next day's Woot, or, barring that, the first to post an opinion about it.

And then the clock strikes 12 in Dallas. And the Woot of the day is a DVD writer.

From "gobanjoboy" at 12:00:03 a.m.: "Man this woot is just in time. I needed a brand name DVD writer. Woot rocks!"

Matt Rutledge had an innovative idea for selling online: Just sell one thing at a time.
Matt Rutledge had an innovative idea for selling online: Just sell one thing at a time.

Eight posts later, from Cyberlore: 12:00:20: "dude I totally wan't [sic] ready. seems like I could find a much faster drive for not too much more with rebates and such, but still not a bad price."

Eight posts after that, this, inexplicably, from jmeier: 12:01:04 a.m: "bitches on my ding dong...First page, in for 3 Bitches! Booyakasha!"

Welcome to the strange, caustic, funny and ultimately ingenious world of woot.com, a Dallas-based Web site that sells only one item a day.

"We anticipate profitability by 2043," Woot's FAQ sheet says.

But it's bluffing. "It's kind of like eBay meets Wal-Mart," says Dan Noyes, the president of Zephoria Inc., an Internet marketing firm with offices in D.C. and New York. Zephoria doesn't have Woot as a client but is fascinated nonetheless. "This will revolutionize what more traditional Web sites do."

Here's how it works: Woot buys items at drastically reduced or even discontinued prices--but buys just enough to stock them in its Dallas warehouse. At midnight, woot.com features a new item for sale. Now, it isn't just one item Woot's selling. It's "x" number of units of that item--say, 600-some units of one digital watch. And all of the units for the same, are-you-sure-I'm-not-stealing-this price.

The beauty of the business model is this: Woot never tells the potential buyer how many units remain to be sold that day. Hence the crazed lot of about 10,000 from across the world, the number estimated by Woot that visit the site at midnight Dallas time, when the next day's item is posted and, if it's really good, snatched up before the rest of the world can get to it. Once, Woot sold out of units for the day at 2:30 a.m.

"It's quite original," says John Lee, vice president of marketing and sales at Hostway, the fifth-largest Web hosting provider in the world. "I really haven't seen anything like it on the Web...Who's behind it? Who is this guy?"

Thirty-three-year-old Matt Rutledge, who, at 22, started his own wholesale company in Dallas and in July of this year launched Woot, the Internet offshoot of it. "How cheap can we buy the items that we sell? This is the business model of both companies," Rutledge says.

The site is a combination of the words "wow" and "loot" and gets about 80,000 visitors a day. Items sell, on average, for about one-third of their retail value. Sponsors now appear at the top of the home page. Academics and business analysts alike call Rutledge a wonder-boy CEO, but Rutledge doesn't think so. He doesn't even approve of his title. "CEO may not be appropriate for the business [Woot] is," he says.

He's right. CEO is too stodgy. Woot's fun. Take the "Bag O' Crap."

One day in August, instead of featuring a technology-based item, as it normally does, Woot featured a bag with a mystery item inside. For $1, people bought the mystery bag and received a toilet bowl brush, or a cement monk to place in one's front yard, or a "car charger battery thing," Rutledge says. "Or other completely randomized items."

You should have seen the posted comments on the community board that day, Rutledge says.

That's the other thing. The posts. They're funny, informative or just plain weird. But they give Woot credibility, because it doesn't offer customer service. It just has the posts on the community board, where past customers are encouraged to praise or vilify anything they've bought on Woot.

Rutledge loves it. There, for all to see, are the ugly truths about his company. Which, truth be told, aren't that ugly.

"The service has been good," says Mark Ross, who lives in Irving, works for a packaging company and checks out Woot every day. From the time Ross buys something--say, a computer speaker set for $24.95 that retailed for $60--it usually takes Woot two days to get the item to his door. "And it's in good shape," he says.

Molly Savage is 33 and lives in Dallas. "I've got some Christmas shopping done already," she says. She's told her friends about Woot, too. One of them was Rob. "God, every time there's a watch on there," Savage says, "he's got it." And her husband, Chris, found a guy who offered a Woot paging service. So now, every night at midnight, Chris' pager beeps and tells him what the Woot of the day is. And Molly's mother? Charlotte Purcell? Well, she doesn't admit to staying up that late, but she is more and more, Molly says.

"Most of the things I want," Purcell reasons, "they sell out so quick." --Paul KixNews Blackout

No news is news, at least when WFAA-Channel 8 opts not to broadcast its regular 10 o'clock newscast. That was the case on November 11, when the local ABC affiliate ditched its "bread and butter," in the words of one exec at a competing station, for a half-hour tribute to military veterans, or what WFAA news officials refer to as a "single-topic newscast." The channel hasn't done that since May 1996, says vice president of news David Duitch. Back then the station filled the half-hour with a special report about heroin in local high schools.

Duitch says the move was "absolutely" a result of WFAA's decision not to air Saving Private Ryan, which ABC was offering to affiliates as part of its Veterans Day programming. The local channel was among more than 20 other affiliates across the country that, following substantial Federal Communications Commission fines over so-called explicit content, decided to sub Steven Spielberg's graphic Oscar-winning World War II movie during prime time for more family-friendly fare--in this case, the 1986 movie Hoosiers, which Channel 8 broadcast only 10 days earlier, all but guaranteeing low viewer turnout. Channel 8 aired its tribute to blunt the criticism of veterans who were unhappy over the decision to yank Private Ryan, which Duitch says it did because "presumably young folks are in the audience" at 7 p.m. and didn't think it "responsible" to broadcast that movie, which Spielberg and ABC would not allow to be edited. (Channel 8 did air the uncut movie in 2001 and 2002.) Duitch insists the station didn't receive a single letter or call from viewers wondering what happened to their regular newscast.

Execs at local competitors insist Channel 8 had other motives for not airing its regular newscast: to keep what was bound to be a low-rated broadcast from being counted in the ratings book during November sweeps. Duitch scoffs at the notion, of course, insisting that more than twice the people who saw Hoosierstuned in for the veterans tribute. "I'd like to find any other station that went up 50 percent from their lead-in," he says. "But it's so nice they're worried about us." --Robert Wilonsky

Sky's the Limit

Music and software composers aren't the only ones who draw knives when their creations are threatened by theft. Bar creators don't like it when you mess with their brainchildren either, especially when the bars are hip South Beach/L.A. joints enhanced with a little celebrity cachet.

Just ask Dallas restaurant and lounge sire Erol Staraveci of the Alfredo's Pizza & Pasta family. Last summer Staraveci transformed the torpid Milkbar on Lower Greenville Avenue into a Mediterranean tapas bar with a "Dallas-meets-South Beach" lounge called Sky Bar. This didn't sit too well with Ian Schrager, founder of New York's famed Studio 54 discothèque, and his firm 8440 LLC. Through 8440, Schrager licenses the trademarked Skybar lounge to Miami's South Beach Shore Club Hotel as well as the Mondrian Hotel in Hollywood. Court papers describe both Skybar lounges as "world-famous exclusive clubs that attract a hip and trendy crowd" and "an absolute legend among loungers" that "frequently host VIP events and cater to celebrities."

But what might have really gotten under Schrager's skin was Staraveci's chutzpah: In mid-September he hosted a Studio 54 party at his Skybar knockoff. A few days later Staraveci received a letter from Schrager's lawyers demanding he cease operating under the Sky Bar name. A trademark infringement suit followed a week later. "We had no prior knowledge that it was federally trademarked since it was so overused throughout the country," Staraveci insists. "It was an honest mistake."

Honest or not, Schrager and company are demanding not only that the Greenville Avenue bar change its name; they're insisting they pocket the bar's profits and three times actual damages plus punitive damages. "He wants to make us an example to the rest of the country," Staraveci laments. "He's a real asshole...he's just playing hardball." Hard or not, Staraveci has changed the name of what court papers call the "bogus Dallas SKY BAR." It's now called Syn Bar. Real sin must already be trademarked. --Mark Stuertz

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