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Avoiding the Crowd
More and more companies are making it easy and safe to shop on the 'Net

Last month's column explored the potential of e-commerce in a way that presented the possibilities for buying goods and services via the Internet in a realistic light. The final assessment went something like this: E-commerce is a fact and it is growing rapidly. It is not, however, nearly as well-developed and widespread as most people seem to believe, and there are many obstacles that stand in the way of its continued development. This month's column explores some of the ideas that business and government are implementing to encourage the growth of e-commerce.

First, it might be instructive to differentiate between e-commerce and what we might call e-business. E-business has been going on for a long time now, primarily through corporate internal data telecommunications and, in the case of inter-corporate communications, through the use of what's known as Electronic Data Interchange (EDI). E-commerce, on the other hand, refers to the business conducted between the consumer and retailers of goods and services. While e-business is conducted primarily via proprietary networks or leased lines (though use of the Internet for these purposes is growing), e-commerce is conducted primarily via the Internet using the consumer's browser on his or her PC. Thus, the means for increasing e-commerce that we are examining are directed squarely at consumers.

As a consumer, you'll be astonished and gratified to learn that the federal government is on your side in this matter, at least for the time being. In October the U.S. Senate passed the Internet Tax Freedom Act by a vote of 92-2, which indicates bipartisan agreement that is rarely achieved in the nation's capital. The House already passed another version of the bill, and now all that remains is to work out the minor differences between the two, which may have already happened by the time you read this column. The bill makes the Internet a tax-free zone for most transactions for the next three years, the rationale being that the Internet is all about information, and information shouldn't be taxed. Of course, the states that have already passed laws putting sales taxes on Internet transactions don't agree with that assessment, but federal law supersedes state law.

To make computer shopping more of a painless process, some companies, such as California-based Live Picture Inc., are offering products that make it easier for consumers to view graphics-based documents such as catalogs, brochures, and pricelists without resorting to special software. Former Apple CEO John Sculley, who is backing the company, is also encouraging retailers to adopt a "network printing" solution to publishing and distributing catalogs. He notes that about 30% of the information printed in catalogs is out of date by the time it reaches the consumer.

Of course, one good way to enhance the growth of e-commerce is to put computers in the homes of people who don't already have them. To that end, competition in the low-end PC market has heated up to a fever pitch. Several companies are already offering a complete set-up, equipped with monitor, modem, and CD-ROM drive, for less than $500. Even IBM is coming out with a new computer priced at $599 with monitor and $499 without. And in response to Gateway's $49.95 a month PC leasing program, Apple is now offering its popular iMac for $29.95 a month, which should certainly post some significant numbers in addition to the 300,000 or so iMacs already sold. Interestingly enough, almost a third of those iMacs have gone to first-time computer buyers. Apple is doing what Internet retailers want to do -- instead of just increasing market share, they are increasing the market itself.