Features

Curbing the online ramp

National | A St. Louis mall forbids ads for Internet sales

Issue: "Mid-term, mid-field pileup," Dec. 11, 1999

Retail luddites
Many brick-and-mortar stores feel threatened by e-commerce, but the Saint Louis Galleria has taken one of the most drastic steps against online competition: Its management told its 170 tenants that all signs, decals, advertising, and displays about Internet sales were forbidden. That sent retailers buzzing. An educational toy retailer, The Right Start, threatened to sue. The Athlete's Foot had to figure out what to do with a seven-foot sign encouraging people to "shop online anytime." Stores like Eddie Bauer and FAO Schwartz promoted their websites on shopping bags. For the companies, money is money, whether it comes from a store or from the Net. And to keep pace with the competition, especially well-financed online-only stores, shops are decking the aisles with promotions. Online shopping is exploding quickly-and this Christmas season is the biggest yet. Some analysts predict online sellers will rake in $3 billion to $8 billion this season. That's a fraction of the $170 billion spent last holiday season at regular stores, but e-commerce moguls plan to narrow the gap within a few years. Some e-tailers are already happy about this season. Amazon.com reported that orders on Thanksgiving weekend were up 150 percent from last year. Portal sites Yahoo! and Lycos said the day after the holiday was their biggest day ever. Online toy stores like Toysrus.com and KBKids.com were so mobbed by customers that they were hard to access. Meanwhile, the Saint Louis Galleria's bosses say in-store Net promotions take money out of the mall. The complex is the first to take such drastic measures. "Our primary interest is to maximize local store sales in our mall," said Mark Zorensky, president of mall owner Hycel Properties. Monopoly money?
As Microsoft's lawyers headed into their first meeting with federal mediator Richard Posner, the tone of the ongoing anti-trust case had changed radically in just a few weeks. Now the Redmond software giant is officially a monopoly, carrying a target on its back and being thrust toward the federal judge who is mediating the case. But did Microsoft abuse its monopoly power to dominate the software industry, specifically in the web browser market, by using Internet Explorer to topple Netscape? Trial judge Thomas Penfield Jackson ruled that Bill Gates & Co. hurt consumers and stifled innovation, but didn't say specifically which antitrust laws were violated. Among the possible outcomes: The company could be broken up like AT&T into little "Baby Bills." Microsoft's Internet Explorer might have to be split from Windows or many specific products might be divested. Or the company could be forced to pay tobacco-style settlements to the government. All of this leaves some wondering if the case will increase federal encroachment into the laissez-faire software industry. Now Microsoft is being nailed with a host of private lawsuits and various state and federal lawsuits, including suits filed in Alabama, California, Louisiana, and New York. The company's massive profit margins have helped it gather a liquidity of $19 billion with no debt. While Microsoft can afford to fight these battles, the suits make the company an easier target and may pressure its leaders to make a deal with the Feds. "As more of these lawsuits are filed, you have to assume that Microsoft will look for some way to try to prevent the trial from going to conclusion," said Richard Thomas Delamarter, an expert on corporate monopolies at Yale University. Wearable Web
Do you need a computer? Do you want to escape from sitting behind a desk? Is a laptop too bulky and a Palm Pilot too dumbed down? The answer may be a type of PC once relegated to manufacturing and factory floors: wearable computers. Camera maker Olympus and IBM showed off a prototype "Wearable PC" just after Thanksgiving. The device could be in Japanese stores soon. Instead of a monitor, the screen is a monocle with a display that fits over one eye. The computer itself is a pocketbook-sized box with two buttons. Wearable computers aren't new. For industrial uses, some heavy, full-size PCs fit around the body like a bulky version of Batman's utility belt. This new version weighs only 13 ounces. It packs an Intel Pentium processor, has 64 megabytes of memory, and even runs Microsoft Windows. To use the IBM/Olympus device, you must put on a special headset from which a tiny screen flips out over one eye. The buttons and a touchpad are used to click icons. There's no keyboard yet, but one may appear in the future. Other wearables in the market are already getting smaller. One, from a company called Xybernaut, uses a head-mounted display and runs on voice recognition. Battery life is from four to six hours and they can cost several thousand dollars, depending on features and power. As such products become more mainstream, we could see more people wanting hard drive wired to their heads. People could check their e-mail or zap aliens while jogging or sitting on a bus.

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