Egghead Software
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Egghead Software was an American
computer software Software is a set of computer programs and associated documentation and data. This is in contrast to hardware, from which the system is built and which actually performs the work. At the lowest programming level, executable code consists ...
retailer. Founded in 1984, it filed for bankruptcy in 2001 and its
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was acquired by
Amazon.com Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential econo ...
.


History

The company was founded by Victor D. Alhadeff in 1984, as a single store in
Bellevue, Washington Bellevue ( ) is a city in the Eastside region of King County, Washington, United States, located across Lake Washington from Seattle. It is the third-largest city in the Seattle metropolitan area and has variously been characterized as ...
. Customers were able to sign up for a "CUE" card ("Customer Updates and 'Eggs' tras") that would provide discounts. By June 1987, when Alhadeff was 40 years old, the company had 50 stores on the
West Coast of the United States The West Coast of the United States, also known as the Pacific Coast, Pacific states, and the western seaboard, is the coastline along which the Western United States meets the North Pacific Ocean. The term typically refers to the contiguous U.S ...
. In June 1988, the company became a
public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...
via an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
. Within a year, the stock price dropped from $17 per share to $11 per share and top executives, including the founder, were sued for fraud for failing to disclose material facts about the true condition of the company's inventory systems and finances. By December 1989, the company had 206 stores, but closed 20 of them due to losses and inventory issues and theft. In June 1993, the company released its first software product, Egghead Express, which allowed customers to place and manage orders. In 1995, the company moved its headquarters from
Issaquah, Washington Issaquah ( ) is a city in King County, Washington, United States. The population was 40,051 at the 2020 census. Located in a valley and bisected by Interstate 90, the city is bordered by the Sammamish Plateau to the north and the " Issaquah Al ...
, east of
Seattle Seattle ( ) is a seaport city on the West Coast of the United States. It is the seat of King County, Washington. With a 2020 population of 737,015, it is the largest city in both the state of Washington and the Pacific Northwest regio ...
, to
Spokane Spokane ( ) is the largest city and county seat of Spokane County, Washington, United States. It is in eastern Washington, along the Spokane River, adjacent to the Selkirk Mountains, and west of the Rocky Mountain foothills, south of the Ca ...
. At that time, it had 2,500 employees and operated retail stores in 30 states. Also in 1995, when the development manager of
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wanted to test compatibility, he bought a copy of every program for sale at an Egghead store. In 1996, George Orban became chairman and in January 1997, he became CEO. In May 1996, Egghead sold its Corporate, Government & Education division to Software Spectrum for $45 million. At that time, the stock price was $6 per share and there was speculation of a takeover of the company. In February 1997, the company announced it would close 77 of its 156 stores and reported additional losses. In May 1997, the company acquired competitor Surplus Software Inc. for $31.5 million. In January 1998, the company reported a loss and announced it would close all 80 of its remaining stores, lay off 600 of its 800 employees, and sell only through its website, Egghead.com. Its stock price fell 18% on the news. In July 1998, during the
dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Compo ...
, shares soared to $25 as investors bought up shares of internet companies. In 1999, the company merged with OnSale.com in a $375 million all-stock transaction. The company kept the Egghead.com name and the CEO of Onsale,
Jerry Kaplan Samuel Jerrold "Jerry" Kaplan (born March 25, 1952) is an American computer scientist, author, futurist, and entrepreneur. He is best known as a pioneer in the field of pen computing and tablet computers. He is the founder of numerous companie ...
, became CEO of the combined company. In December 2000, right before
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, the company's servers were compromised, and it feared that the credit card data of over 3.7 million people was stolen. The company first publicly denied that there was a problem, then notified
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, which notified banks, who notified consumers, causing the breach to escalate into a full-blown scandal. Many credit cards were cancelled. The company later discovered that credit card information was not obtained. In August 2001, the company filed bankruptcy and worked out a deal to be acquired by Fry's Electronics. However, the deal fell apart after Fry's accused Egghead of failing to provide financial documents, and in December 2001, the company sold its
domain name A domain name is a string that identifies a realm of administrative autonomy, authority or control within the Internet. Domain names are often used to identify services provided through the Internet, such as websites, email services and more. As ...
to
Amazon.com Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential econo ...
.


References

{{Dot-com Bubble 1980s initial public offerings Amazon (company) American companies established in 1984 Companies that filed for Chapter 11 bankruptcy in 2001 Defunct retail companies of the United States Dot-com bubble Internet properties disestablished in 2001 Retail companies established in 1984 Retail companies disestablished in 2001 Software companies established in 1984 Software companies disestablished in 2001 Defunct companies based in Spokane, Washington