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If you want to contemplate the sheer looniness that surrounds my favorite third-rate Internet retailer, Overstock.com (NASDAQ:OSTK), just think of this: at about the same time a mind-boggling "Entrepreneur of the Year" award was bestowed on its serially inept CEO, "Dr." Patrick Byrne, Advertising Age reported that the company was abandoning its costly rebranding effort, O.co.

Really, where does one begin? Whose incompetence is more egregious? Ernst & Young, which is responsible the "entrepreneur of the year" embarssment, or Byrne, who squandered millions of dollars on a fundamentally ill-conceived rebranding effort? ("An excellent example of naval-gazing" by a company that is out of touch with consumers, as one industry expert told Ad Age.)

Or the continued servility and cowardess of the Utah press corps, which slobbered over this peculiarly timed "honor" while ignoring all of the reasons it is a joke? And has yet to mention the O.co disaster, the company's flirtation with insolvency or the libel suit against its CEO?

True, in the litany of Ernst & Young embarassments, the award to Byrne, who also is abandoning four business segments that were proven failures, is hardly earth-shattering. I mean, how does it compare this stupidity to standing by and watching while Lehman Brothers engaged in its Repo 105 book-cooking scheme?

Still, you have to savor the fact that this multinational accounting firm is so dimwitted that it not only doesn't recognize an incompetent CEO when it sees one, but actually gives an award to one. How can you possibly trust this accounting firm to root out accounting misdeeds by its auditing clients? The answer is that you can't (not that there ever was any doubt on that score).

Mind you, this is not the first time E&Y has chosen a slug as its "entreprenur of the year." As Herb Greenberg pointed out at the time, E&Y named Pre-Paid Legal (NYSE:PPD) founder Harland Stonecipher its "Regional Master Entrepreneur of the Year" in 2002:

So here we are, in an environment focused on the most intense accounting scrutiny, and one of the country's largest remaining CPA firms is giving its seal of approval to Pre-Paid, which has been forced by the SEC to restate its earnings because of the way it accounted for commission advances to its sales force, and Nautilus, whose financial documents are full of inconsistencies and numbers that simply don't add up. (Not that anybody cares!)

That was bad, but I'd respectfully suggest that the timing of the Byrne selection beats even that.

Just last week, it was reported in AllthingsD.com that Overstock had shuttered three of its product categories, and placed a fourth on hold. All had been introduced with great fanfare, and all were quietly put on the shelf.

The O.co disaster takes the cake. First the company announced on July 20 that it bought the domain name for a whopping $350,000 of its scarce cash. As Ad Age pointed out, the company "began an aggressive run of TV commercials that declared, 'Overstock.com is now O.co'" at about that time.

And now, barely four months later, it's all over. A flop.

It was irretrievably dumb. Customers went to "O.com" instead of O.co, and were so confused that it was pointed out at the company's conference call a couple of weeks ago that the changeover had contributed to a decline in revenues. "We were going too fast and people were confused, which told us we didn't do a good job," Overstock president Jonathan Johnson told Ad Age.

Meanwhile, the company still faces default on its bank obligations -- another achievement of Ernst & Young's Entrepreneur of the Year -- and it continues to fend off consumer fraud litigation by California prosecutors that could push it over the edge.

What is Byrne doing to grapple with these immense problems? Our Entrepreneur of the Year is giving interviews at Occupy Wall Street, where the far-right Milton Friedman aficionado is trying to palm himself off as a man of the people.

I tell you, Overstock.com/O.co and its award-winning CEO may not generate much money for their shareholders, but they can always be counted upon for a good laugh.

Source: Overstock Abandons O.co