Pets.com sells name to rival Petsmart

Petsmart.com will use the URL to redirect Pets.com customers. Sock Puppet is not part of the deal.

Pets.com Inc., one of the highest-profile Web-retail failures this year, is selling its Web address to former rival Petsmart.com.

Starting Monday, Web surfers who try to use Pets.com's URL will be taken to a page on the Petsmart.com (petm) site that welcomes them and offers first-time Petsmart.com buyers $10 off a $25 purchase of certain supplies.

In a press release, Pets.com said it signed a nonbinding letter of intent to sell "various urls" and "related trademarks" to Petsmart.com. The purchase price wasn't disclosed and neither company could be reached immediately for comment.

The deal doesn't include any other operating assets of the San Francisco company, including its famous Sock Puppet character or its product inventory. On Nov. 7, Pets.com laid off 255 of its 320 employees and said it will sell the majority of its assets.

The sale of the URL, which should be finalized in about a month, shouldn't "materially increase" any distributions Pets.com might make to its stockholders after it has disposed of its assets, the company said in the release, adding that it "may not be able to generate meaningful cash, or any cash, which could be returned to its stockholders."

Petsmart.com was formed in 1999 when the Web operations of Petsmart Inc., a brick-and-mortar pet-supply retailer, were merged with PetJungle.com, which was backed by idealab, the Pasadena, Calif., technology incubator.

Petsmart, based in Phoenix, agreed last month to make a $30 million financial commitment to Petsmart.com, increasing its stake in the Pasadena, Calif., Web retailer to 81 percent from 48.2 percent on a fully converted basis as of June 30.

Last week, Petsmart.com said it withdrew its previously announced plan for an initial public offering of as much as $115 million in stock, citing unfavorable market conditions. The company said its cash needs would be met by the Petsmart commitment.