Ax-Wielding Continues - Internet/Web/Online Service Information

Industry Standard, The, Sept 11, 2000 by Joshua Hallford

Aug. 28 to Sept. 1, 2000 A spate of Layoffs jarred an otherwise smooth coast through the last week of August. Health site Drkoop.com cut a third of its staff; online drugstore PlanetRx dropped 50 jobs; Net travel company Sabre let 1,100 people go; and software maker MicroStrategy slashed 234.

Cutting expenses through layoffs is becoming a bit of a trend, especially among online retailers. One out of 10 e-retailers is reducing staff to lower costs, according to a new study from Shop.org and Boston Consulting Group.

Online shopping picked up; both dollars and number of orders increased. And the Commerce Department says second-quarter e-commerce sales grew to $5.5 billion, a 5.3 percent gain over the first quarter.

There was a 10 percent drop in average advertising spending per company. Hardware and electronics firms and entertainment outfits on average cut spending by about one-fourth.

Consumer confidence in the Internet Economy inched up to 93.7 in August, according to marketing research firm NPD. Surfers are maintaining their optimism, but overall the Conference Board's Consumer Confidence Index for August slipped below July's number.

Internet stocks were up percent on the week, and there were no Net IPOs.

The Internet Economy Index rates the week of Aug. 28 a 5.

SHOPPING

Back to School. The average online purchase amount was up slightly and the total number of orders continued to increase. Back-to-school shopping on the Net spurred growth in apparel and toy categories. Out of the eight online categories tracked by BizRate.com, only the home and garden category slumped.

BUZZ

Net Taxes Make News. Although the number of press releases touting the Internet continued to slip, the Internet made big news in California. The State Assembly announced it will send a bill to the governor next week to require multichannel retailers to add sales tax to online purchases made by California residents.

INTERNET ECONOMY INDICATORS FOR THE WEEK OF AUGUST 28, 2000

SHOPPING 2%

BUZZ 5%

ADVERTISING 10%

STOCKS 5%

IPOs -2

TRAFFIC 0%