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 06-01-2001Jeff Bezos is JealousJonathan Nee NetCompass News Editor The Biggest E-tailer of Them AllOne of the largest online retailers in America made $3.6 billion dollars in sales last year and believe it or not, Jeff Bezos had nothing to do with it. According to a report by Federal Computer Week, the federal government has become one of the biggest online retailers in America, easily surpassing the $2.8 billion in sales brought in by Bezos' Amazon.com. Funded by the Pew Internet and American Life Project, the report claims that the government supports or operates more than 164 sites where users can buy everything from horses to toothpaste. The Department of Defense has at least 8 sites alone. The Treasury Department's treasurydirect.gov web site exceeded all other sites making over $3.3 billion last year, selling savings bonds, T-bills and notes. Although still in its infancy, online retailing is fast becoming a component of many government agencies and changing the manner in which those agencies conduct transactions. While the goverment may be the biggest etailer in America, it has not exactly proven itself the seminal force behind ecommerce in this country. Colossal sites like Amazon and Wal-Mart bring a vast amount of products under one roof and pride themselves on their efficiency. Many government web sites are scattered across the internet and their products hidden. Still others are unable to execute electronic transactions. Yet most users find the products and the prices at these sites intriguing. Need a couple of horses? How about buying a pair of wild mustangs at the Bureau of Land Management's auction site, www.adoptahorse.blm.gov. Or maybe you have been dreaming about owning a Dodge Viper. Rulon Gardner, the 2000 Olympic gold medalist, found one online at a private service commissioned by the U.S. Marshals Service and for $10,000 less than he would have paid elsewhere. Purchases need not be so exotic or extravagant. Many people do not realize that they can conduct more pedestrian government business over the internet, such as buy stamps at the United States Postal Service's usps.gov web site. Opposition to Uncle Sam making a profit online has already taken root among some private businessmen and politicians and should receive more attention as a group of 4 House members voices its concerns in a meeting with the head of the General Services Administration (the GSA auctions off surplus federal items at gsaauctions.gov). But with President Bush's recent push for e-government funding, america.com will most likely carry on with its big business. While We're on the Subject of Additional ChargesLawmakers in Washington have reached an agreement to extend the moratorium on internet sales taxes another 5 years. The original piece of legislation, the Internet Tax Freedom Act, put a moratorium on all new internet sales taxes and will expire in October. The new bipartisan agreement extends that moratorium until 2006 and gives states a five year timeframe during which they must develop a simplified tax collection plan. States must create uniform definitions for goods and services, agree on one national sales tax rate or one rate per state and any plan must meet the approval of Congress. Millions in state revenues are at stake. States, municipalities and small merchants are all eager to see a new sales tax plan implemented. States like Wyoming and Texas collect no income tax and depend on sales tax for funding vital social services such as healthcare and education. Likewise, small businesses support the tax because recent consumer dynamics have shown an increasing number of shoppers flocking to the internet as a tax haven. Opponents fear that a sales tax will hinder growth in an industry that can scarcely afford it, given the current economic climate. Internet sales are handled the same way as catalogue and telephone sales. If the retailer has a store in the purchaser's state, a sales tax is added to the purchase. But the Supreme Court has ruled that companies cannot be required to collect taxes in states where they have no physical presence. With 7,600 state and local taxing jurisdictions, sales tax would prove to be a logistical nightmare for online retailers. The new bipartisan plan for simplification has won support from the Bush administration. Upon approval, taxes on almost all internet and catalogue purchases will be collected. Windows NT Culls Higher Insurance PremiumsThe Insurance Information Institute estimates that the hacker insurance sector of the market may generate $2.5 billion in annual Prepaid Internet AccessDespite analysts' warnings of a small market and the difficulties of breaking into a sector where companies are already firmly entrenched, a growing number of companies are offering internet access under the disposable phone card model. Companies like Slingshot.com are hoping that the 24 percent of U.S. households without a credit card can be tapped. ISP's such as AOL, MSN and EarthLink usually require a credit card for monthly billing. Consumers can now enter a store, purchase a $10.00 CD-ROM and get 600 minutes of internet access. Proponents see the model benefitting more than just the credit-challenged. Users who surf infrequently or only check their email a few times a week will certainly see the service as a boon, while business travelers can save on long distance rates. Prepaid firms like MaGlobe specialize in having local access numbers and offer toll-free access lines. In addition to a limited market, critics also say that prepaid access is a haven for criminals, providing just the kind of anonymity they seek. Those claims are well-founded. Onel de Guzman, author of the Love Bug virus, used a prepaid service called SuperNet in Manila to launch his attack. Still, the recent Juno-NetZero merger leaves only one free ISP standing. That factor combined with the simplicity of the new service may set the stage for prepaid internet access to thrive. AOL Price Increase May Benefit MSNLast week AOL, the flagship internet unit of the world's largest Internet and media company, announced it will raise the monthly price of its unlimited use plan to $23.90 from $21.95 with the July billing cycle. Rumors of a price increase had been circulating for some time and analysts speculate the move may be necessary to meet AOL Time Warner's aggressive year-end growth goals. The plan, which gives users unlimited access to AOL's services, has not received a price increase in three years. Meanwhile, Microsoft Corporation is licking its chops. Its MSN Internet unit launched a $50 million advertising campaign designed to woo customers from rival AOL. The campaign will include nationwide advertisements and a limited-time promotion that offers consumers who switch to MSN by June 30 three months of free internet access as well as a guaranteed rate of $21.95 a month until Jan. 1, 2003. The Biggest E-tailer of Them AllOne of the largest online retailers in America made $3.6 billion dollars in sales last year and believe it or not, Jeff Bezos had nothing to do with it. According to a report by Federal Computer Week, the federal government has become one of the biggest online retailers in America, easily surpassing the $2.8 billion in sales brought in by Bezos' Amazon.com. Funded by the Pew Internet and American Life Project, the report claims that the government supports or operates more than 164 sites where users can buy everything from horses to toothpaste. The Department of Defense has at least 8 sites alone. The Treasury Department's treasurydirect.gov web site exceeded all other sites making over $3.3 billion last year, selling savings bonds, T-bills and notes. Although still in its infancy, online retailing is fast becoming a component of many government agencies and changing the manner in which those agencies conduct transactions. While the goverment may be the biggest etailer in America, it has not exactly proven itself the seminal force behind ecommerce in this country. Colossal sites like Amazon and Wal-Mart bring a vast amount of products under one roof and pride themselves on their efficiency. Many government web sites are scattered across the internet and their products hidden. Still others are unable to execute electronic transactions. Yet most users find the products and the prices at these sites intriguing. Need a couple of horses? How about buying a pair of wild mustangs at the Bureau of Land Management's auction site, www.adoptahorse.blm.gov. Or maybe you have been dreaming about owning a Dodge Viper. Rulon Gardner, the 2000 Olympic gold medalist, found one online at a private service commissioned by the U.S. Marshals Service and for $10,000 less than he would have paid elsewhere. Purchases need not be so exotic or extravagant. Many people do not realize that they can conduct more pedestrian government business over the internet, such as buy stamps at the United States Postal Service's usps.gov web site. Opposition to Uncle Sam making a profit online has already taken root among some private businessmen and politicians and should receive more attention as a group of 4 House members voices its concerns in a meeting with the head of the General Services Administration (the GSA auctions off surplus federal items at gsaauctions.gov). But with President Bush's recent push for e-government funding, america.com will most likely carry on with its big business. \ Total Site NewsRose Biomedical of Denver has engaged Total Site's web design and development services for the construction of an informational site. Rose Biomedical conducts research, brings new technologies and devices to market, assists physicians in developing and commercializing inventions and offers a variety of other services to help inventors and technology companies develop new medical devices that improve care and reduce costs. Total Site NewsThe W.W. Reynolds Companies and Total Site have reached an agreement on the design and development of two web sites. W.W. Reynolds will sponsor a Boulder portal in the first site, offering users a full range of news and events surrounding the community. The second will entail a complete redesign of the W.W. Reynolds corporate web site. W.W. Reynolds is one of Boulder's leading real estate developers. While We're on the Subject of Additional ChargesLawmakers in Washington have reached an agreement to extend the moratorium on internet sales taxes another 5 years. The original piece of legislation, the Internet Tax Freedom Act, put a moratorium on all new internet sales taxes and will expire in October. The new bipartisan agreement extends that moratorium until 2006 and gives states a five year timeframe during which they must develop a simplified tax collection plan. States must create uniform definitions for goods and services, agree on one national sales tax rate or one rate per state and any plan must meet the approval of Congress. Millions in state revenues are at stake. States, municipalities and small merchants are all eager to see a new sales tax plan implemented. States like Wyoming and Texas collect no income tax and depend on sales tax for funding vital social services such as healthcare and education. Likewise, small businesses support the tax because recent consumer dynamics have shown an increasing number of shoppers flocking to the internet as a tax haven. Opponents fear that a sales tax will hinder growth in an industry that can scarcely afford it, given the current economic climate. Internet sales are handled the same way as catalogue and telephone sales. If the retailer has a store in the purchaser's state, a sales tax is added to the purchase. But the Supreme Court has ruled that companies cannot be required to collect taxes in states where they have no physical presence. With 7,600 state and local taxing jurisdictions, sales tax would prove to be a logistical nightmare for online retailers. The new bipartisan plan for simplification has won support from the Bush administration. Upon approval, taxes on almost all internet and catalogue purchases will be collected. \ Windows NT Culls Higher Insurance PremiumsThe Insurance Information Institute estimates that the hacker insurance sector of the market may generate $2.5 billion in annual \ Prepaid Internet AccessDespite analysts' warnings of a small market and the difficulties of breaking into a sector where companies are already firmly entrenched, a growing number of companies are offering internet access under the disposable phone card model. Companies like Slingshot.com are hoping that the 24 percent of U.S. households without a credit card can be tapped. ISP's such as AOL, MSN and EarthLink usually require a credit card for monthly billing. Consumers can now enter a store, purchase a $10.00 CD-ROM and get 600 minutes of internet access. Proponents see the model benefitting more than just the credit-challenged. Users who surf infrequently or only check their email a few times a week will certainly see the service as a boon, while business travelers can save on long distance rates. Prepaid firms like MaGlobe specialize in having local access numbers and offer toll-free access lines. In addition to a limited market, critics also say that prepaid access is a haven for criminals, providing just the kind of anonymity they seek. Those claims are well-founded. Onel de Guzman, author of the Love Bug virus, used a prepaid service called SuperNet in Manila to launch his attack. Still, the recent Juno-NetZero merger leaves only one free ISP standing. That factor combined with the simplicity of the new service may set the stage for prepaid internet access to thrive. AOL Price Increase May Benefit MSNLast week AOL, the flagship internet unit of the world's largest Internet and media company, announced it will raise the monthly price of its unlimited use plan to $23.90 from $21.95 with the July billing cycle. Rumors of a price increase had been circulating for some time and analysts speculate the move may be necessary to meet AOL Time Warner's aggressive year-end growth goals. The plan, which gives users unlimited access to AOL's services, has not received a price increase in three years. Meanwhile, Microsoft Corporation is licking its chops. Its MSN Internet unit launched a $50 million advertising campaign designed to woo customers from rival AOL. The campaign will include nationwide advertisements and a limited-time promotion that offers consumers who switch to MSN by June 30 three months of free internet access as well as a guaranteed rate of $21.95 a month until Jan. 1, 2003. Total Site NewsRose Biomedical of Denver has engaged Total Site's web design and development services for the construction of an informational site. Rose Biomedical conducts research, brings new technologies and devices to market, assists physicians in developing and commercializing inventions and offers a variety of other services to help inventors and technology companies develop new medical devices that improve care and reduce costs. \ Total Site NewsThe W.W. Reynolds Companies and Total Site have reached an agreement on the design and development of two web sites. W.W. Reynolds will sponsor a Boulder portal in the first site, offering users a full range of news and events surrounding the community. The second will entail a complete redesign of the W.W. Reynolds corporate web site. W.W. Reynolds is one of Boulder's leading real estate developers. \ Free Shipping, We Hardly Knew YouYou've finally found that perfect gift for Father's Day. You're ready to checkout of the online shopping cart when you notice that shipping will cost you an extra $15.00, thus negating any advantages you would have had in making the purchase on the web. Such is the state of affairs for the online retail industry today. Gone are the days when you could order dog food in bulk over the internet and have it shipped to your house for free. Online retailers like Pets.com barely made it out of the gates before their free-shipping models buried them. According to a new survey by an internet metrics research group, almost half of the largest online retailers take in profits that extend beyond actual merchandise sales. Jupiter Media Metrix reports that there has been an industry-wide increase in shipping charges and that they range from subtly padded to downright outrageous. The average merchant made the increase seeking not to achieve profit increase, but merely to avoid the fate of early retailers like Pets.com. In the interest of simplicity, weight-based charges requiring calculations for each individual order have given way to flat shipping rates. Jupiter's study reports that many of the additional charges are nominal on individual purchases, but can fast approach absurdity on bulk orders. For example, an order from CDNow for 200 CD's will incur $200.00 in shipping costs. The actual shipping cost to CDNow? Just $28.00. It should surprise no one then, that a survey of online shoppers conducted in April found that 63 percent had decided not to complete a planned online purchase because of the sticker shock over the shipping charges. 73 percent said they considered shipping costs along with the cost of the item when comparing products among e-tailers. While shipping increases may alienate customers, it is unlikely that you will see a significant change. Investors are wary of strategies using low-cost or free shipping as a customer acquisition tool. \ Free Shipping, We Hardly Knew YouYou've finally found that perfect gift for Father's Day. You're ready to checkout of the online shopping cart when you notice that shipping will cost you an extra $15.00, thus negating any advantages you would have had in making the purchase on the web. Such is the state of affairs for the online retail industry today. Gone are the days when you could order dog food in bulk over the internet and have it shipped to your house for free. Online retailers like Pets.com barely made it out of the gates before their free-shipping models buried them. According to a new survey by an internet metrics research group, almost half of the largest online retailers take in profits that extend beyond actual merchandise sales. Jupiter Media Metrix reports that there has been an industry-wide increase in shipping charges and that they range from subtly padded to downright outrageous. The average merchant made the increase seeking not to achieve profit increase, but merely to avoid the fate of early retailers like Pets.com. In the interest of simplicity, weight-based charges requiring calculations for each individual order have given way to flat shipping rates. Jupiter's study reports that many of the additional charges are nominal on individual purchases, but can fast approach absurdity on bulk orders. For example, an order from CDNow for 200 CD's will incur $200.00 in shipping costs. The actual shipping cost to CDNow? Just $28.00. It should surprise no one then, that a survey of online shoppers conducted in April found that 63 percent had decided not to complete a planned online purchase because of the sticker shock over the shipping charges. 73 percent said they considered shipping costs along with the cost of the item when comparing products among e-tailers. While shipping increases may alienate customers, it is unlikely that you will see a significant change. Investors are wary of strategies using low-cost or free shipping as a customer acquisition tool. |
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