Who sold the first bottle of wine over the internet?
Virtual Vineyards went live in January 1995 out of Los Altos, California. Robert Olson, a software engineer, built the site. Peter Granoff, his brother in law and the 15th American to pass the Master Sommelier exam, in 1991, chose the wine.
It was not a wholesaler with a web page bolted on. Granoff picked small producers that could not afford national distribution, wrote his own tasting notes and food pairings, and answered buyer questions by email. The early orders were handled largely by hand.
That was the whole insight, and it was a good one. An American wine buyer in 1995 was not short of places to buy Chardonnay. What they could not do was find a few hundred cases of Pinot Noir from a Sonoma vineyard with no distribution east of San Jose. For that grower, the web was the only route to a customer in Ohio.
Virtual Vineyards grew on that niche for four years, small and steady, and became the example reporters reached for when they needed proof that internet retail worked at all. Then the money arrived.
Why did Virtual Vineyards rename itself Wine.com?
At the end of the decade the company bought the wine.com domain name and renamed the site after it. The brand Olson and Granoff had built since 1995 was retired in a press release.
There was logic in it. wine.com was the most valuable address in the category, and naming yourself after the search term was ordinary practice at the time. Pets.com was built on the same theory in the same period.
The theory had a hole in it. Renaming yourself after a web address pays off only once buyers type that address, and Americans were not yet buying wine online in volume. The category was being created, not captured, and creating it cost money.
Money was arriving anyway, at a rival. Peter Sisson founded WineShopper.com in the late 1990s on the opposite plan: enormous inventory, aggressive pricing, national scale, and backing from Kleiner Perkins Caufield and Byers and from Amazon. A third entrant, eVineyard, opened in Portland, Oregon under Michael Osborn with no national ambition at all. It ran licensed warehouses and worried mostly about which orders it could legally ship.
By 2000, three companies were chasing the same buyer. Wine.com had the name. WineShopper.com had the capital. eVineyard had the licenses.
What did the three tier system do to the wine dot-coms?
The reason wine was hard to sell online in the United States was never technical. It was legal.
When Prohibition ended in 1933, the Twenty-first Amendment left alcohol regulation to the states. Most of them built a three tier system: producers sell to licensed wholesalers, wholesalers sell to licensed retailers, retailers sell to consumers, and the chain cannot be skipped.
For a retailer in California shipping a bottle to a customer in Pennsylvania, that meant a license in Pennsylvania, possibly a Pennsylvania wholesaler, possibly a state run store at the end of the line. Repeat across fifty states and the District of Columbia. Some states allowed direct shipment. Some banned it outright. Some allowed it for in state wineries but not for out of state retailers. A few treated shipping a bottle to a consumer as a crime.
The pitch decks assumed the addressable market was the United States. The shippable market was a subset of it that moved with every legislative session, and that gap is where the venture money went. Wine had a version of the problem Webvan and Kozmo.com had with perishables and delivery density. The constraint sat in the physical and legal world, not in the website.
How did eVineyard end up with the Wine.com name?
Wine.com and WineShopper.com stopped fighting and merged in the summer of 2000, keeping the Wine.com name. The public markets that might have funded either one on its own had closed that April.
The combination did not fix the arithmetic. On April 3, 2001 the company cut about 160 of its 245 employees, two thirds of the staff, spread evenly across its Napa and San Francisco offices. The Napa Valley Register reported the cuts as an attempt to strip out the duplication the merger had created.
Weeks later, eVineyard bought what was left. It took the Wine.com and WineShopper.com names and web addresses and left the debt where it was. "We didn't pay anywhere close to $17 million, I can tell you that," eVineyard president Larry Gerhard told Wine Spectator in 2001, referring to the roughly $17 million the company owed. eVineyard negotiated the purchase with Sand Hill Capital II of Palo Alto, Wine.com's main creditor, and did not take the wine inventory.
That was the end of the wine wars in a single transaction. The best known name in online wine went to the company that had raised the least and shipped the most carefully.
Is Wine.com still in business in 2026?
Yes. Wine.com is still trading in 2026, still privately held, and still run from San Francisco. The corporate line runs back to eVineyard rather than to Virtual Vineyards: the buyer of April 2001 is the owner today, and it never went public.
It also grew into the name it bought. For the fiscal year ended March 31, 2020, Wine.com reported $165 million in revenue, a rise of 25 percent and a gain of $33 million that the company called the largest year over year increase in its history. April 2020 alone passed $40 million, up 350 percent on April 2019, as shelter in place orders shut tasting rooms. That fiscal 2020 figure is the last full year revenue the company has published.
Ownership is a list of investors rather than a parent. Wine.com has taken outside capital over the years, including growth capital from funds managed by Goldman Sachs Asset Management, but no public company or holding group owns the business. Michael Osborn, who founded eVineyard and ran merchandising at Wine.com for two decades, left in 2025 to become chief executive of Willamette Valley Vineyards.
Did Granholm v. Heald open the market up?
Partly, and four years too late for the companies that needed it. In 2005 the Supreme Court decided Granholm v. Heald, striking down Michigan and New York laws that let in state wineries ship directly to consumers while barring out of state ones.
Justice Anthony Kennedy wrote for the majority that "in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate differential treatment of in-state and out-of-state economic interests." The Court held that the discrimination in the two state laws was "neither authorized nor permitted by the Twenty-first Amendment."
Granholm did not abolish the three tier system, and it spoke to wineries more than to retailers. Wine.com still ships from licensed facilities, state by state, rather than from one warehouse. What changed is that the hardest bans came down and a national online wine business became something the law would tolerate.
The market that opened is now contracting. The 2026 Direct-to-Consumer Wine Shipping Report from Sovos called 2025 the worst year in the history of the report, with both the volume and the value of shipments falling as Americans drink less wine. Twenty five years after the wine wars, the legal problem is largely solved and demand is the new one.
Frequently Asked Questions
Does Wine.com still exist in 2026?
Wine.com still exists in 2026. It is a privately held online wine retailer run from San Francisco, and it has been owned since April 2001 by the company founded as eVineyard, which bought the Wine.com name and website when the original business collapsed. No public company or holding group owns it.
Who was the first company to sell wine online?
Virtual Vineyards, launched in January 1995 by software engineer Robert Olson and Master Sommelier Peter Granoff, is credited with the first wine sold over the internet in the United States. The company renamed itself Wine.com at the end of the 1990s after buying the domain name, merged with WineShopper.com in the summer of 2000, and ran out of money in 2001.
Why did the 1990s online wine companies fail?
The online wine companies of the late 1990s failed on alcohol law rather than on technology. The three tier system built after Prohibition left shipping rules to individual states, so the market a retailer could legally serve was far smaller than the national market the business plans assumed. Wine.com cut two thirds of its staff on April 3, 2001 and sold its assets to eVineyard weeks later.