The biggest, most painful bankruptcies of the 21st century
Some bankruptcies you hear about and get on with your day as though nothing happened. Others leave a mark. Thinking of some companies always brings a rush of emotions and nostalgia because they once played such a significant role in our lives.
Yes I know, they’re just businesses.
But wait till you see my list.
At one point, these companies were all anyone could talk about. Some of us couldn’t even imagine our lives without them. And I bet the companies themselves didn’t see it coming either.
So, without further ado, let’s get into the nitty-gritty. Here are the biggest, most painful bankruptcies of the 21st century that shook us to the core:
Toys ”R” US
When Toys "R" Us filed for bankruptcy in 2017, it marked the end of an era. And no, it wasn’t just Amazon that did them in. The company had been grappling with debt for years, consistently failing to meet customer expectations. Adding to their woes was the poor customer experience, which often left shoppers wandering the aisles looking for what they needed. Then, of course, came Amazon and other online toy retailers who simply did it better (and cheaper).
However, Amazon didn’t play nice. Toys "R" Us signed a 10-year partnership with the retail giant, agreeing to stock a wide variety of its most popular toys on Amazon in return for exclusive rights as the only seller of toys and baby products on the platform. There was even a period when the Toys "R" Us website redirected customers to Amazon. The company paid $50 million a year to Amazon, plus a commission on sales, and the partnership worked – for a while.
Amazon then decided to bring other sellers onto the platform, which led Toys "R" Us to take the case to court for violating the terms of their partnership. Toys "R" Us won the right to terminate the agreement and even received a $51 million settlement from Amazon. Although Toys "R" Us launched a new website following the dispute, by that time, most consumers had already shifted to buying directly from Amazon.
Blockbuster
Don’t get me wrong, I love the convenience of Netflix. But I still remember the little rush I felt every Friday afternoon when I was heading to Blockbuster to pick out a movie or two for the weekend – and some pick 'n' mix snacks, of course.
It was the ultimate experience.
Unfortunately, Blockbuster underestimated the "dot-com hysteria" and refused to adapt its traditional video rental model, mistakenly believing that people wouldn't embrace online streaming. At that time, Netflix was just getting off the ground, offering DVD rentals through the mail. It wasn’t very profitable, and at one point, founders Marc Randolph and Reed Hastings (the same Reed Hastings who co-founded LinkedIn) even tried to sell Netflix to Blockbuster for $50 million.
Randolph revealed in one of his tweets last year that they were "laughed out of the room" when Blockbuster heard their offer. So while Blockbuster continued charging per rental, Netflix pivoted to online streaming and introduced unlimited rentals for a flat monthly fee. By 2013, streaming services had become so popular that Blockbuster had no choice but to close all of its 9,000 stores.
Yahoo!
I know Yahoo is around, I still have an email address with them. But today, that's pretty much all Yahoo is used for, aside from a few smaller services like Finance or News. And once the email is gone… Yeah.
Once the most visited website in the whole world, Yahoo was an online directory that allowed users to browse the internet by topic. It might sound weird now, but the web was an unmanageable beast when it first started gaining popularity and Yahoo tamed that beast. The company truly was the tech giant of the late '90s and early 2000s.
But Yahoo made a few really bad decisions along the way. The first one was when Yahoo refused to buy Google for $1 million (!) when the company was still in its infancy in 1998 (and then, failed to keep up with Google’s growing dominance as the go-to search engine). Later, Yahoo attempted to acquire Google again for $3 billion, but it wouldn't agree to Google's counteroffer of $5 billion.
Yahoo also missed the boat on purchasing Facebook for just $1 billion, opting instead to acquire services like Tumblr and Alibaba, which ultimately did little more than drain their finances. Microsoft's offer to buy Yahoo for $44.6 billion in 2008 was a brief glimmer of hope, but that too faded when negotiations fell through. Finally, in 2017, Verizon Communications acquired Yahoo's core internet business for a mere $4.48 billion.
Blackberry
At its peak, Blackberry was a status symbol. Being able to access corporate emails from your phone changed everything – it meant you didn't have to be stuck at the office to catch up on work. I still remember that iconic QWERTY keyboard. Everyone who was anyone had a BlackBerry. Barack Obama, Madonna, Lady Gaga… You name it, they had it.
What went wrong? iPhone was introduced. BlackBerry’s primary focus was always on business clients, while Apple targeted individual consumers also with access to work emails or calendars and better features like the touchscreen or good-quality cameras. And guess what, business people also like having nice phones. By the time Blackberry tried (and failed miserably) to win some of its customers back with its first touchscreen model, Storm, it was too late.
As of 2016, Blackberry hasn’t manufactured a single smartphone, and the company has since transitioned into a cybersecurity company.
Nokia
If you didn’t own a BlackBerry, chances are, you had a Nokia. And even if you didn’t, I bet you remember playing Snake, one of the three games included on the Nokia 6110. Nokia was the most reliable cell phone of its time. No matter how many times you dropped it, it just kept working perfectly.
At one point in the early 2000s, Nokia, a company that started as a Finnish paper mill in 1865, held a whopping 49.4% of the phone market share worldwide. But they really missed the mark when smartphones took over. While Apple and Samsung were rolling out sleek smartphones with iOS and Android, Nokia clung to their old-school QWERTY keyboards, betting that people wouldn’t warm up to touchscreens.
Realising their error too late, Nokia scrambled to catch up by launching their own operating system, Symbian OS. But it was no match for the competition. Symbian was clunky, lacked the cool apps everyone wanted, and just couldn’t keep up with user demands.
2010 is when things really started to spiral though. In just 6 short years, Nokia watched about 90% of its market value vanish into thin air, and the company never managed to bounce back – not even after Microsoft tried saving it with the Nokia Lumia and the Asha series.
Myspace
Myspace. It was one of the first – and arguably the best – social networking sites out there. So many great memories… At its peak, with over 75 million users a month, it was the place where the cool kids hung out. And the fact we were able to customise our profiles and reach our favourite music artists directly was just mindblowing.
But if you visit the Myspace website today, you'll see it barely resembles its former glory, and no new articles have been published since 2022. Unfortunately, Myspace's rise caught the eye of Rupert Murdoch's News Corporation, which bought it for $580 million. They began implementing changes – changes that marked the beginning of the end for Myspace, with Facebook’s arrival serving as the final nail in its coffin.
The overwhelming number of ads pushed on us after the acquisition made navigating Myspace a nightmare. So, when Facebook appeared with its clean and user-friendly design, it's no surprise that almost 50% of Myspace's users abandoned the site altogether in 2010. Not to mention, Myspace passed on the chance to acquire Facebook for just $75 million before it went viral. Ouch.
(Sony) Walkman
Kids today might not recognise a cassette, but back in the day, Walkmans were a game-changer. They even sparked what’s known as "The Walkman Effect", which means tuning out the world by plugging into your music. Walkmans were essentially predecessors of iPods and while you don’t think twice before streaming music on the go, portable music players with headphones were once something unheard of.
Back then, there was either the boombox or the radio stations, and when you listened to music, you were always sharing it with someone else. With Walkmans, people could finally personalise their music collections, and experience them anytime, anywhere, in their own private little world.
The Walkman gave Sony a head start in the portable music scene, but things changed fast as tech moved forward. Apple’s iPod took over and Sony just couldn’t keep up. Their focus was still on hardware, while the market was shifting toward easy, user-friendly experiences. By the time they stopped making cassette Walkmans in 2010, streaming had taken over, and personal music players were already something of the past.
Still, over 400 million Walkmans sold isn’t a bad legacy – and for some, the memories live on.
Polaroid
Yes, the same Polaroid that invented instant photo and print in the 1970s. They’re one of those iconic brands that became a household name – like Sellotape or Hoover. No family event or gathering was complete without your mom hovering with a Polaroid camera, snapping pictures and fanning them to dry.
Polaroid cameras made instant prints easy and hassle-free, and by the late 1960s, sales had shot up to $400 million. Polaroid’s hold on the market was so strong that when Kodak tried to enter, Polaroid didn’t hold back and took Kodak to court for infringing on its patented technology. After a decade-long legal battle, Polaroid came out on top, walking away with nearly a billion dollars in damages.
But, like many other once-popular brands I’ve mentioned, Polaroid failed to listen to its customers and adapt when digital photography was just starting to emerge. Polaroid was, after all, in the business of selling film and so they believed people would always value hard-print copies more.
And we do value them, of course. But I’ll keep using my smartphone camera nevertheless.
