$8 Million Marketing Campaign Can't Keep Flooz.com Online

Even Whoopi Goldberg isn't as popular as cold, hard cash. That's a lesson learned by Flooz.com, the online money company that spent $8 million on a marketing campaign featuring Goldberg, but went offline this week as customers just plain failed to show up. Offline since Wednesday, the company's Web site explains, "We are currently unable to process your transaction. We are working very hard to resume Flooz.com Web-site operations. Check back for further updates." It offers no contact information beyond a customer service E-mail address.

While the concept of E-mailing money may sound cool, there's no consumer behavior harder to change than people's attachment to their wallets, analysts say. And the more steps they have to take to implement a change, the less likely it is to succeed. Outside of PayPal, which found a quick niche as a payment option for auction sites like Ebay, the history of alternative payment solutions has been peppered with failure.

"Our research shows consumers would like to have an alternative to credit cards and more security, but they're not willing to do anything special to get there," says Gartner senior analyst Avivah Litan. For example, while research has shown that people believe PIN number requirements for credit and debit cards increase security, they still have been unwilling to sign up for schemes like American Express' blue card, or to add smart-card readers to their home computers.

"I think it reflects the problem that many alternative currencies face, which is liquidity," says a spokesman at PayPal. "Currency you can only use in 10 places is nowhere near the same thing as cash. PayPal, on the other hand, is inherently extremely liquid. We're not an alternative currency, but U.S. currency you can use anywhere."