Overstocks’ revenue fell three consecutive years beginning in 2005; it finally managed to increase its sells in 2008. However, the company has a history of losses; it has not made any profits since it started in 1999. Although, they have managed to reduce operational costs to some extent, they are still operating in the red. The company has accrued a deficit of more than $260 million and still seeks to spend more. In January 2009, it wanted to increase spending on tech, on an advertising to be used during the Super Bowl, and start a consignment business all while the economy is in one of the deepest recessions it has experienced in decades.
Senior management personnel defections and CEO Patrick Byrne’s involvement in litigation against investment banks are cause for concern, especially in a company that needs significant management attention and restructuring if it is to eventually turn a profit
Overstock has faced decreasing conversion rates (% of Overstock.com visitors who make a purchase) over the last year, and heightened advertising costs have proven ineffective in attracting new customers