A Chihuahua in its natural state: filled with rage.
The dog itself (first played by a dog named Binky, then quickly replaced by one named Gidget, presumably over a bitter contract dispute) and its catchphrase "Yo quiero Taco Bell" skyrocketed in mainstream popularity, as irritating things have a habit of doing.
Chihuahua-mania swept America, and Taco Bell's future never looked better.
So What Went Wrong?
When the Chihuahua was abruptly yanked off Taco Bell ads in 2000, people became suspicious. Many believed that the dog had died and was now being served in gordita form to its adoring fanbase. In reality, the ads were cut because their presence led directly to a 6 percent drop in Taco Bell sales. These results were so bad that the president of Taco Bell, Peter Waller, was swiftly replaced by a former executive for Wendy's.
Because you don't sell a product with talking dogs. You sell it with sex.
As for why exactly the ad didn't make people want to buy actual Taco Bell food, we're going to guess that there's a big difference between saying that, for instance, a cartoon rabbit loves Trix cereal and saying that a real dog likes Taco Bell. Real dogs eat garbage and cat shit. For a chain whose biggest problem is convincing customers that their beef is graded for human consumption, it's bizarre that it thought the best selling point was, "Don't worry, this tiny dog loves it!"
We'd rather eat Alpo than this.
Things went from bad to worse in 2003 when a long-fought legal battle ended between Taco Bell and two men who claimed the company had stolen their idea of a Spanish-speaking Chihuahua, an idea so uniquely brilliant that no one else in the history of the world could have ever thought of it. The two men claimed the Taco Bell executives had signed a contract with them only to back out of the deal and steal the idea for themselves. A jury agreed with them, and awarded them $42 million in damages. Essentially Taco Bell stole a terrible idea and got screwed by it twice.