| In 1998 consumers could purchase
virtually anything over the Internet. Books, compact discs, and even stocks were
available from World Wide Web sites that seemed to spring up almost daily. A few
years earlier, some people had predicted that consumers accustomed to shopping
in stores would be reluctant to buy things that they could not see or touch in
person. For a growing number of time-starved consumers, however, shopping from
their home computer was proving to be a convenient alternative to driving to the
store. A research estimated that in 1998 U.S. consumers would purchase ＄ 7.3 billion of goods over the Internet, double the 1997 total. Finding a bargain was getting easier, owing to the rise of online auctions and Web sites that did comparison shopping on the Internet for the best deal. For all the consumer interest, retailing in cyberspace was still a largely unprofitable business, however. Internet pioneer Amazon. com, which began selling books in 1995 and later branched into recorded music and videos, posted revenue of $153.7 million in the third quarter, up from ＄ 37.9 million in the same period of 1997．Overall, however, the company's loss widened to ＄ 45.2 million from $ 9.6 million, and analysts did not expect the company to turn a profit until 2003．Despite the great loss, Amazon com had a stock market value of many billions, reflecting investors' optimism about the future of the industry. Internet retailing appealed to investors because it provided an efficient means for reaching millions of consumers without having the cost of operating conventional stores with their armies of salespeople. Selling online carried its own risks, however. With so many companies competing for consumers' attention, price competition was intense and profit margins thin or nonexistent. One video retailer sold the hit movie Titanic for ＄ 9.99, undercutting (削价) the ＄19.99 suggested retail price and losing about ＄ 6 on each copy sold．With Internet retailing still in its initial stage, companies seemed willing to absorb such losses in an attempt to establish a dominant market position. |