Overspend on website promotion topples company
The failure of a competitor has turned into a website marketing coup for MotorcycleCenter.com, which hopes to benefit from many more active customers.
Motorcycle firm purchases competitor for website marketing potential
Monday, December 13 2010 by Kate Billinghurst
The failure of a company that overspent on website marketing has turned into an excellent chance for another competitor to grow, as it buys out its former rival.
MotorcycleCenter.com this month announced that it acquired TheHelmetZone.com, one of the top online sellers of motorcycle helmets, motorcycle jackets and biker gear, after the latter bottomed out following an overspending on website promotion.
Prior to its decline, TheHelmetZone.com had over 25,000 active customers and these will now transfer to MotorcycleCenter.com, where a much wider range of products and an “overall more satisfying shopping experience” will be provided to them. On top of this, completely new products will be made available.
MotorcycleCenter.com was sad to see a fellow business be pushed into insolvency and commended those who ran TheHelmetZone.com for achieving one of the best customer service ratings online. “Their ability to acquire customers and maintain loyalty is inspiring, and we are sorry to see such a great competitor go,” it asserted.
However, the experience highlighted a major issue facing companies with website marketing challenges. MotorcycleCenter.com remarked that the high cost of running an internet business and the evolution of technological demands meant that the site became too much of a burden for the owners, as the costs of website promotion rose as sales remained stagnant or fell.
The major factor in the acquisition of the company, ironically, was the investment in website marketing, MotorcycleCenter.com explained. It said: “TheHelmetZone.com just over spent, simple as that. Their need to be #2 or #3, or #4 on keywords overtook what was prudent and what the site was actually capable of sustaining.
“We have seen that several firms who have contacted us were overspending on online advertisement. It’s almost like being at a casino waiting for an order.”
MotorcycleCenter.com added that is may continue with its process of acquisitions over the coming months as a means of saving money on its own website promotion. “We are hoping to capitalise on this trend and hopefully take over a few more sites that have spent years building a brand and customer base for pennies on the dollar,” it added.
Another business looking to expand to new territory with website acquisition was Google, though this month, Groupon turned down the internet giant’s $6 billion offer.
Living Streams “Improving clients’ profitability through better use of the internet”.