A true e-commerce fairy tale: Diamonds online from Blue Nile

Gary Rivlin tells a wonderful e-commerce fairy tale in today's New York Times. The story with the title "When buying diamonds starts with a mouse" is about Mark Vadon's "Blue Nile" company which sells diamonds on the Web.
Here are some key points of the story but don't miss to read the real thing.
1) Doug Williams, a Seattle jeweler, spends in 1995 $2,000 on a Web site for selling diamonds; he calls it "Internet Diamonds";
2) in 1998 Mark Vadon, a management consultant with Bain & Co, walks out of Tiffany's where he was willing to spend up to $17,000 on a engagement ring; service was unsatisfactory;
3) Vadon finds Internet Diamonds, is satisfied with the advice he gets online and he buys a $5,800 diamond ring;
4) later Vadon visits Williams in Seattle and offers him $ 5 M for a 85% stake in the company; this was the boom time of the dot.com bubble and Vadon manages to raise $ 6 M venture capital within 8 weeks and another $ 40 M within the following 12 months;
5) Vadon renames the company "Blue Nile" and in 2000 has annual revenues of $ 44 M but loses $ 30 M because of a $ 40 M television advertising bill; Vadon raises another $ 7 M venture capital in 2001 to stay afloat;
6) "Blue Nile" now is the third largest diamond retailer in the USA after Tiffany & Co and Zale Corp.; in 2006 Blue Nile buys diamonds worth $ 170 M;
7) Blue Nile's mark-up is 20% compared to the industry's ~ 50%; it sells diamonds for 35% less than its competitors.

RAEM