Kozmo.com Said to Be in Talks with PDQuick

Internet convenience store Kozmo.com reportedly is in talks to acquire rival Web delivery service PDQuick.com.

CNet News.com, citing an unnamed PDQuick employee, reported that Kozmo officials were in talks at PDQuick headquarters in Camarillo on Wednesday. Kozmo officials declined to comment.

Dan Frederickson, PDQuick’s chief executive, also declined to comment on discussions with Kozmo.com other than to say that he “knows their CEO [Gerry Burdo] very well” and that “we have talked about alliances and things like that.”

Analysts were skeptical about how cash-strapped, unprofitable Kozmo.com could afford to make such a big acquisition. The company recently announced a cost-cutting campaign that included layoffs in Houston and San Diego. It still delivers in Los Angeles.

“I have a hard time believing that Kozmo can spare any cash right now,” said Ken Cassar, an analyst with Jupiter Communications in New York. “And I can’t think of any other way they could pay for PDQuick.”

Known as Pink Dot before its name change last year, PDQuick delivers groceries, prepared foods and liquor to customers in Los Angeles and Orange counties in 30 minutes or less for a $2.99 delivery fee.

The firm had planned to expand nationally this year and branch out into other types of products, but Frederickson said the lack of venture capital funding thwarted its efforts.

Analysts believe that Kozmo could be looking to consolidate its efforts in affluent parts of Los Angeles where PDQuick has built up a large customer base.