Since 1999, Overstock.com has been one of the Internet’s retail mainstays, selling everything from bras to bedsheets to bookshelves at attractively low prices.
Now, the company is reportedly planning to shed its billion-dollar e-commerce business, per The Wall Street Journal, in lieu of an all-or-nothing bet on blockchain, the decentralized electronic database technology that CEO Patrick M. Byrne thinks will dictate how systems are built in the future.
In Overstock’s Q3 2018 financial performance report, Byrne refers to the company’s new venture as a “keiretsu”—the Japanese term for a conglomerate of companies with intertwined business relationships and shareholdings—of blockchain enterprises, signaling perhaps the role that he believes the emerging technology will play in underpinning systems and society going forward.
It’s an intriguing turn of events for one of the web’s earliest e-commerce companies and a robust endorsement—deserved or not—of blockchain technology. Critics say the decentralized database technology secured by cryptography—best known as the foundation underpinning bitcoin and other cryptocurrenices—is wildly overhyped, while advocates believe its smart contracts and immutability can bring trust and transparency into finance, shipping, logistics, supply chain and other important areas of business.
Preparing for next year’s sale, Overstock is retooling investments in e-commerce accordingly. “We have pivoted our e-commerce business from the ‘accelerate at any cost and ignore the losses’ standard Internet model, back to our rational economic agent model,” Byrne said in the Q3 earnings report, crediting the move with reducing quarterly losses from $57 million to $29 million.
Under its Medici Ventures subsidiary, Overstock operates 19 blockchain offerings, including Bitsy, a mobile app that lets users buy, hold and transfer bitcoins. Byrne said in early 2019, Overstock.com will integrate with Bitsy’s technology and make bitcoins available for sale directly through the dot-com website. Other blockchain ventures focus on payments, trading security token assets, and agribusiness, to name a few.