The Ecommerce Almanac: Profiles from the Internet Economy

June 2000 edition The Reference Series Intermarket Group

The eCommerce Almanac: Profiles from the Internet economy

Amazon.com, Inc. Amazon.com Home Page 1200 12th Avenue South Seattle, WA 98144, U.S.A. Tel. 206-266-1000 Fax 206-266-4206

Unique Visitors (March 2000): 14,812,000 Reach: 21.9% Rank: 13

ORGANIZATION Business Sector: Books and Music/Videos, Consumer Electronics, Computer Hardware and Software, Toys and Sporting Goods, General Merchandise Founded: July 1994 Employees: 7,600 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Seattle, WA headquarters • Seattle, WA distribution facility • New Castle, DE distribution facility • Fernley, NV distribution facility • Coffeyville, KS distribution facility • Campbellsville, KY distribution facility • Lexington, KY distribution facility • McDonough, GA distribution facility • Grand Forks, ND distribution facility • Marston Gate, UK distribution facility • Bad Hersfeld, Germany distribution facility Telecenter: In-house call centers located in Seattle and Tacoma, WA; Huntington, WV; Grand Forks, ND; Slough, England; The Hague, Netherlands; and Regensburg, Germany

-- Continued on page 5 -- The eCommerce Almanac

Table of Contents

Company Profiles Merisel, Inc...... 113 Amazon.com...... 1 MVP.com, Inc...... 114 Ameritrade ...... 8 NetB@nk ...... 116 AMP Electronic Commerce...... 10 NetGrocer Inc...... 118 Art.com Inc...... 11 NextCard, Inc...... 119 Ashford.com, Inc...... 13 OfficeDepot.com...... 122 autobytel.com inc...... 15 OfficeMax.com ...... 124 autoweb.com...... 17 1-800-FLOWERS, Inc...... 125 BabyCenter Inc...... 19 OneCore.com ...... 128 BarnesandNoble.com Inc...... 21 Outpost.com...... 130 Beyond.com Corp...... 24 Peapod, Inc...... 132 Biztravel.com, Inc...... 26 Pets.com, Inc...... 134 Bluefly, Inc...... 28 PETsMART.com, Inc...... 136 Bolt, Inc...... 30 PlanetRx.com Inc...... 138 BUY.COM, Inc...... 32 Priceline.com Inc...... 141 CarsDirect.com Inc...... 34 Quicken Loans Inc...... 143 CDnow, Inc...... 37 Recreational Equipment Inc...... 145 CDW Computer Centers, Inc...... 39 Reel.com, Inc...... 147 CompUSA Inc...... 41 Charles Schwab & Co. Inc...... 149 Crutchfield New Media LLC...... 43 Sharper Image Corp...... 151 Dell Online...... 44 SportsLine.com, Inc...... 153 drugstore.com, inc...... 45 Staples.com ...... 156 eBay Inc...... 48 Tower Records...... 158 Eddie Bauer, Inc...... 50 Toysrus.com, Inc...... 160 Egghead.com, Inc...... 52 Travelocity.com Inc...... 162 800.com Inc...... 54 Wal-Mart.com Inc...... 164 E-LOAN Inc...... 56 Webvan Group, Inc...... 166 eToys Inc...... 59 Wells Fargo & Company ...... 169 E*TRADE Group, Inc...... 61 Wine.com...... 171 Expedia, Inc...... 65 Analysis of Profiled Companies FastParts.com...... 67 Profiled companies at a glance...... 177 FirstAuction ...... 68 Measuring the size of Fogdog Inc...... 70 profiled companies...... 179 Food.com Inc...... 72 Offline presence of profiled companies ...... 182 FTD.com...... 74 Profiled websites at a glance ...... 183 Furniture.com Inc...... 76 Technologies deployed by Gap Inc. Direct...... 78 profiled websites ...... 188 Garden.com, Inc...... 80 Driving traffic to profiled websites ...... 193 Gateway, Inc...... 82 Customer support infrastructure...... 196 Grainger.com ...... 84 Financial performance of HomeGrocer.com, Inc...... 86 profiled companies...... 197 HomePoint Corp...... 88 eCommerce Market Briefing IMX Exchange...... 90 The Internet user ...... 209 Ingram Micro Inc...... 92 Internet user activities ...... 214 InsWeb Corp...... 94 Leading Internet sites and brands...... 218 International Business Machines ...... 96 Sizing B-to-C Internet commerce ...... 221 iOwn ...... 97 Internet shopper/purchaser behavior ...... 227 iPrint.com, inc...... 99 Sizing B-to-B Internet commerce ...... 230 iQVC...... 101 Trends in managing Internet J. Crew Group Inc...... 103 commerce initiatives ...... 233 JCP Internet Commerce Solutions, Inc...... 105 Internet Commerce KBkids.com LLC...... 107 executive compensation ...... 238 Lands’ End, Inc...... 109 Online advertising overview ...... 245 L.L. Bean, Inc...... 111

2 copyright  2000 by The Intermarket Group The eCommerce Almanac

List of Charts and Tables 8.06 Revenue Per Pageview by Sector (Q1 2000)...... 200 Section 2 8.07 Customer Acquisition Cost (1999)...... 200 1.01 Types of Companies...... 177 8.08 Marketing Expenditures (1998 - Q1 2000)...... 201 1.02 Ownership of All Profiled Companies ...... 177 8.09 Marketing Budget as a Percentage 1.03 Ownership of Pure-Play Internet Companies ...... 178 of Revenue (Q1 2000)...... 202 1.04 Most Active Investors ...... 178 8.10 Revenue From Repeat Customers (1999)...... 202 2.01 Online Revenue (1999) ...... 179 8.11 Average Order Value (1999)...... 203 2.02 Online Revenue Growth (1999 vs. 1998)...... 179 8.12 Profitability of Profiled Companies (1999) ...... 203 2.03 Annualized Online Revenue (Q1 2000) ...... 180 8.13 Net Margins of Profiled Companies (1999) ...... 204 2.04 Internet Employees per Company ...... 180 2.05 Customers and Registered Users per Profiled Section 3 Website (1999)...... 181 1.01 U.S. Internet Population (1999/2000)...... 209 2.06 Customers and Registered Users per Profiled 1.02 Top 5 Markets by Internet Access (1999) ...... 210 Website (1998 vs. 1999)...... 181 1.03 U.S. Internet Population Growth (1995-2003) ..... 210 2.07 Growth in Customers and Registered 1.04 Gender of Internet Users (2000)...... 211 Users (1998 vs. 1999) ...... 182 1.05 Education Level of Internet Users (2000) ...... 211 3.01 Hardcopy Catalog Circulation...... 182 1.06 Household Income of Internet Users (2000)...... 211 3.02 Storefront Locations of Profiled Companies ...... 183 1.07 Age of Internet Users (2000)...... 212 4.01 Audience of Websites...... 183 1.08 Number of Years Online (2000)...... 212 4.02 Age of Profiled Websites ...... 184 1.09 PC Penetration Rates at Home and 4.03 Size of Profiled Websites ...... 184 at Work (1998-1999)...... 213 4.04 Features in Profiled Websites...... 185 1.10 Top 10 Markets by PC Penetration (1999)...... 213 4.05 Website Back-end Integration...... 185 2.01 Where Users Access the Internet (1999) ...... 214 4.06 Advertising on Profiled Websites...... 186 2.02 Total Time Spent Online (1999-2000) ...... 215 4.07 Unique Visitors to Profiled 2.03 Time Spent Online by Metro Area (1999)...... 215 Websites (March 2000)...... 186 2.04 Time Spent Online by Age Group (1999) ...... 216 4.08 Growth in Unique Visitors to Profiled 2.05 Time Spent Online and Websites (March 1999 vs. March 2000) ...... 187 Pages Viewed (1999-2000) ...... 216 5.01 Hosting Practices of Profiled Websites ...... 187 2.06 Time Spent Online per Session (1999-2000)...... 217 5.02 Number of Hosts & Connectivity Providers 2.07 Leading Online Activities (2000)...... 217 Used by Profiled Websites ...... 188 3.01 Leading Internet Commerce Sites 5.03 Connectivity Solution Providers Used by by Visitor Traffic (2000) ...... 218 Profiled Websites ...... 188 3.02 Leading Financial Services Sites 5.04 Use of Mirrored Sites by Profiled Websites...... 188 by Visitor Traffic (2000) ...... 219 5.05 Hardware Platforms of Profiled Websites...... 187 3.03 Leading Travel Services Sites 5.06 Operating Systems Deployed by by Visitor Traffic (2000) ...... 219 Profiled Websites ...... 189 3.04 Leading Portal Sites by Visitor Traffic (2000) ...... 220 5.07 Webserver Software Deployed by 3.05 Brand Recognition of Internet Profiled Websites ...... 190 Commerce Sites (1998-1999)...... 220 5.08 Commerce Platforms Deployed by 4.01 U.S. Population of Online Buyers (1999/2000)..... 221 Profiled Websites ...... 190 4.02 Total U.S. Consumer Internet 5.09 Profiled Websites Employing Personalization ...... 191 Commerce (1999-2003) ...... 221 5.10 Personalization Solutions Deployed by 4.03 Consumer Internet Commerce Spending Profiled Websites ...... 191 by Category (Q1-2000) ...... 222 5.11 Database Platforms Deployed by Profiled 4.04 Top Consumer Internet Commerce Websites...... 192 Categories (Q1-2000)...... 223 5.12 Payment Processing Applications Deployed 4.05 Online Purchasing Penetration by Profiled Websites ...... 192 by Category (1999)...... 223 5.13 Affiliate Management Technology Deployed 4.06 Number of Online Purchases per Buyer (1999)..... 224 by Profiled Websites ...... 193 4.07 Total Spending per Online Buyer (1999) ...... 224 6.01 Partnerships With Web Portals...... 193 4.08 Average Transaction Value 6.02 Partnerships With Leading Web Destinations by Category (Q1 2000)...... 225 and Services ...... 194 4.09 Total Online Holiday Spending (1998/1999) ...... 226 6.03 Offline Media Employed by Profiled Websites...... 194 4.10 Weekly Online Holiday Spending (1999) ...... 226 6.04 Size of Profiled Websites’ Affiliate Programs ...... 195 5.01 How Internet Users Find Websites (1999/2000) ... 227 6.05 Affiliate Program Commission Rates...... 195 5.02 Browser-to-Buyer Conversion Rate (2000)...... 227 7.01 Call Centers at Profiled Companies ...... 196 5.03 Browser-to-Buyer Conversion 7.02 Call Center CRM Representatives...... 196 Rate Trend (1999-2000) ...... 228 8.01 Business Models of Profiled Websites ...... 197 5.04 Why Buyers Make Online Purchases (1999)...... 229 8.02 Revenue per Employee (1999)...... 198 6.01 Total U.S. Business-to-Business 8.03 Revenue Per Visitor (Q1 2000)...... 198 Internet Commerce (1999-2003) ...... 230 8.04 Revenue Per Visitor by Sector (Q1 2000)...... 199 6.02 Top Business-to-Business Internet 8.05 Revenue Per Pageview (Q1 2000)...... 199 Commerce Categories (2000)...... 230 copyright  2000 by The Intermarket Group 3 The eCommerce Almanac

6.03 Business-to-Business Internet Commerce 8.02 Compensation Levels of Internet Management Spending by Category (1999-2003) ...... 231 and Operations Personnel (2000) ...... 244 6.04 Average Value of Business-to-Business 8.03 Fringe Benefits of Internet Management Internet Commerce Transactions (1999) ...... 232 and Operations Personnel (2000) ...... 244 6.05 How E-commerce Transactions are 9.01 Total Online Advertising Conducted (1988/2003)...... 232 Expenditures (1996-1999)...... 245 7.01 Profit Expectations of Internet Commerce 9.02 Online Advertising Expenditure Companies (1999-2003)...... 233 Growth (1998-2003)...... 245 7.02 Off-line Advertising by Internet 9.03 Reach of Leading Ad Networks (2000)...... 246 Companies (1998-1999)...... 234 9.04 Websites Accepting Advertising (1998-1999) ...... 246 7.03 Estimated Customer Acquisition Cost of Leading 9.05 Cost of Online Advertising (1998-1999)...... 247 Internet Commerce Companies (1999)...... 235 9.06 Online Advertising Categories (1999)...... 247 7.04 Average Customer Acquisition Cost (1999) ...... 236 9.07 How Online Ads Are Priced (1999) ...... 248 7.05 Technology Spending of Leading Internet 9.08 Online Ad Spending by Sector (1998/1999)...... 248 Commerce Companies (1998/1999)...... 237 9.09 Ad Banner Click-Through Rate (1999-2000)...... 249 8.01 Executive Compensation of Leading Internet 9.10 Total Offline Advertising Expenditures Commerce Executives (1999) ...... 238 by Category (1999) ...... 249

Published June 2000 ISBN 1-882113-13-6 Copyright  2000 by The Intermarket Group, L.P. All charts and data quoted from third-party sources and contained herein remain the property of and are copyright by their respective owners. All rights reserved.

Reproduction or translation of any part of this work beyond that permitted by Sections 107 and 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to: The Intermarket Group, L.P., P.O. Box 500126, San Diego, California 92150-0126, USA. All information contained in this publication is believed to be obtained from reliable sources. The publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that neither the authors nor the publisher is engaged in offering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers.

4 copyright  2000 by The Intermarket Group The eCommerce Almanac

Amazon.com, Inc. - con’t. • Nextel (provides access from wireless devices) • Nokia (provides access from wireless devices) Ownership: Public • OneClick.com (www.oneclick.com) Trading Symbol: AMZN (NASDAQ) • OracleMobile (www.oraclemobile.com) Major Shareholders: • Palm Computing (www.palm.com) • Jeffrey Bezos, Chairman and CEO (36%) • Prodigy Shopping Network (www.prodigy.com) • Kleiner Perkins Caufield & Beyers (14%) • Sprint PCS (provides access from Sprint PCS phones) • Jacklyn Gise Bezos and Miguel Bezos (3%) • WingspanBank (www.wingspan.com) Financing: $2.68 billion ($1.2bn in equity and $1.5bn in • wisecity.com (www.wisecity.com) long-term convertible subordinated debt) • Yahoo!, Inc. (www.yahoo.com) Profitable: No ($719.968 million loss for FY ’99) • Yahoo! Inc. (www.geocities.com) Affiliates Program: Amazon.com Associates Program WEBSITE OVERVIEW No. of Affiliates: 430,000+ Website: www.amazon.com Commission Rate: 5-15% Site Launch: July 1995 Site Type: Business-to-consumer MANAGEMENT Business Model: Fixed pricing, Auction/Negotiated Jeffrey P. Bezos, Chairman. and Chief Executive Officer. pricing Previously employed by D.E. Shaw & Co., a Wall Street Site Size: 18+ million product SKUs investment firm, as a sr. vice president and prior to that as Languages: English, German a vice president at Bankers Trust Company. B.S. in Accepts Advertising: No Electrical Engineering and Computer Science from Site Features: General help, contextual help, one-click Princeton University. ordering, customer created content, foreign language help Joseph Galli, Jr., President and Chief Operating Officer. pages, low bandwidth version Previously served in a variety of positions with The Black Back-end Integration: Access to customer account and Decker Corp, including president of Black and information, order history, order processing, payment Decker's Worldwide Power Tools and Accessories. B.S. in processing, order status, and shipment tracking are Business Administration from the University of North integrated into website. Carolina and M.B.A. from Loyola College. Warren Jenson, Senior Vice President and Chief MARKETING Financial Officer. Previously served as executive vice Media: Television and radio advertising, consumer and president and CFO for Delta Air Lines and senior vice business periodical advertising president and CFO for the National Broadcasting Partnerships: Company (NBC). B.S. in Accounting and Masters of • America Online (www.aol.com) Accountancy -- Business Taxation from Brigham Young • America Online (www.netscape.com) University. • AltaVista Company (www.altavista.com) John D. Risher, Senior Vice President of Product • Airtouch (provides access from wireless devices) Development. Previously employed in various marketing • AppCity Corp. (AppCity Shoplayer) and project management positions at Microsoft Corp., • Bell Atlantic Mobile (provides access from Bell including team manager for Microsoft Access and founder Atlantic wireless devices) and product unit manager for the company’s personal • Ceiva (Internet-enabled digital picture frame) finance website, MS Investor. B.A. in Comparative • Dell Computer Corp. (www.dell.com) Literature from Princeton University, • Della.com (www.della.com) M.B.A. from Harvard Business School. • Earthlink Inc. (www.wizshop.com) Richard L. Dalzell, Vice President and Chief Information • E*Trade Group (www.etrade.com) Officer. Previously employed by the Information Systems Division of Wal-Mart Stores, Inc. as vice president of • Excite@Home (www.home.com) information systems and prior to that as business • Excite@Home (www.excite.com) • development manager for E-Systems, Inc. B.S. in Hoovers Inc. (www.hoovers.com) Engineering from the United States Military Academy, • Intuit Inc. (www.quicken.com) West Point. • Intuit Inc. (selected Quicken software products) Mark Britto, Vice President, Strategic Alliances. • iVillage (www.ivillage.com) Previously served as vice president of Accept.com, which • Liquid Audio Inc. (www.liquidaudio.com) he co-founded, and as executive vice president of credit • Microsoft Corp. (www.msn.com) policy at FirstUSA Bank, and as senior vice president of • Motorola (provides access from wireless devices) risk management at NationsBank. B.S. in Industrial

Engineering and Operations Research and M.S. in Sales to Repeat Customers Operations Research from the University of California at 1999...... 70% Berkeley. 1998...... 63% Joy D. Covey, Chief Strategy Officer. Previously 1997...... 60% employed as vice president-operations of Avid 1996...... 46% Technology, Inc.’s Broadcast Division and as vice president of business development for Avid. Also served Marketing Expenditures as CFO of Digidesign, Inc., associate at Wasserstein 1999...... $413.2mn Perella & Co., and a certified public accountant at Arthur 1998...... $132.7mn Young & Company (now Ernst & Young LLP). B.S. in 1997...... $ 39.0mn Business Administration from California State University, 1996...... $ 6.1mn Fresno, M.B.A. from Harvard Business School, J.D. from Harvard Law. Development Expenditures Randy Tinsley, Vice President of Corporate Development 1999...... $159.7mn Douglas Boake, Vice President of Business Development 1998...... $ 46.4mn Owen Van Natta, Senior Director of Business 1997...... $ 12.5mn Development 1996...... $ 2.3mn Shawn Haynes, Director of Business Development Total Customers (end of period) INTERNET INFRASTRUCTURE 1999...... 16.9mn Design Consultants: None 1998...... 6.2mn Site Maintenance: In-house staff 1997...... 1.5mn Hosting Arrangement: On-site server(s) 1996...... 0.2mn Access Provider: UUNET/MCI Worldcom, InterNAP Network Services COMMENTS Hardware Platform: Compaq AlphaServer, Sun Amazon.com is generally considered to be the leading Microsystems, Hewlett-Packard online retailer. The company is responsible for many Operating System: Compaq Tru64 UNIX; HP-UX UNIX, firsts, including creation of the first online affiliate sales Microsoft Windows NT network and development of the one-click ordering feature Web Server Software: Stronghold/Apache (which the company has patented). Founded in 1994, Commerce Platform: Proprietary applications Amazon.com has aggressively expanded its product Web Servers: Multiple AlphaServer 2000s and HP 9000 offerings from exclusively books to today’s twelve V-Class severs different top-level product categories. During the last five Database Platform: Oracle, proprietary application years, the company has launched the following online Database Servers: Multiple AlphaServer 2000s stores: Books (July ‘95), Music (June ‘98), UK and Personalization: Net Perceptions GroupLens German Books (October ‘98), DVD/Video (November Recommendation Engine, proprietary applications ‘98), Auctions (March ‘99), Electronics (July ‘99), Toys Affiliate Management: Proprietary application (July ‘99), zShops (October ‘99), UK and German Music Payment Processing: Proprietary applications, CyberSource (October ‘99), UK and German Auctions (November ‘99), Other Applications: AltaVista Search software, BEA Home Improvement (November ‘99), Software (November Systems WebLogic Enterprise, BMC Software PATROL ’99), Video Games (November ’99), sothebys.amazon.com and BEST/1, Epiphany E.4 customer management suite, (November ’99), UK and German zShops (November ’99), DataSage customer analysis software Tools and Hardware (February ’00), UK and German DVD/Video (March ’00), Lawn and Patio (April ’00), OPERATING BENCHMARKS Health and Beauty (April ’00), Kitchen Store (May ’00), Total Revenue and Home Furnishings (May ’00). 1999...... $ 1.64bn The zShops program enables individuals and small 1998...... $609.8mn businesses to open an online store on the Amazon.com 1997...... $147.8mn site. Participating merchants’ products are also included in 1996...... $ 15.7mn the site’s search results. An Amazon Payments service allows merchants to accept online credit card payments -- International Sales direct deposits are made by Amazon to the sellers checking 1999...... 22% account -- and use the company’s one-click order feature; 1998...... 20% the service also provides a guarantee to both buyers and 1997...... 25% sellers. zShops merchants are charged a $0.10 per product 1996...... 33%

6 copyright  2000 by The Intermarket Group The eCommerce Almanac listing fee plus a completion fee of 1.25%-5.00% of the convenience products for $60 million in March 2000. sale price for each item sold. A related three-year agreement enables the company The company reported $573.89 million in gross revenue to offer one hour delivery for selected products and for the first quarter ending March 31, 2000 with a loss of points of delivery using Kozmo.com’s services. $308.43 million. Approximately 3.1 million new • living.com, an online retailer of home products and customers were added during the quarter -- bringing the services. cumulative total to 20 million -- and 76% of sales where • NextCard Inc. In December 1999, the company generated by repeat customers. announced a five year partnership with this online The company is organized into three principal operating issuer of consumer credit cards to create an segments: “U.S. Books, Music and DVD/ video” which Amazon.com affinity card. The partnership also encompasses the U.S. online stores for books, music and granted the company warrants to acquire up to 9.9% DVDs/videos; “Early-Stage Businesses and Other” which of NextCard. consists of U.S. online stores for electronics, software, • Della.com, an online service for gift registry, gift video games, toys, and home improvement products, U.S. advice, and personalized gift suggestions. marketplace services, and the Amazon.com Commerce • Sothebys. An auctioneer that the company has Network; and “International” which includes all operations partnered with on an online auction site for art, in Germany and the UK. antiques and collectibles. The Amazon.com Commerce Network refers to • eZiba.com. selected strategic partners that sell products and services Major acquisitions by the company include the April under co-branded sections on the Amazon.com Web site. 1998 purchase of online retailers Bookpages and Telebook The Network currently consists of the following -- which served as the foundation of its entry into the companies: European marketplace -- and the U.K.-based entertainment • Ashford.com. The company purchased a 17% stake in content site, Internet Movie Database. In August 1998, the this online retailer of luxury and premium products for company acquired PlanetAll, which provides a Web-based $10 million in December 1999. address book, calendar, and reminder service, and Junglee • Audible. The company purchased a 5% stake in this Corp., a provider of advanced Web-based virtual database provider of Internet-delivered spoken audio for PC- (VDB) technology. In April 1999, the company acquired based listening and playback devices in January 2000. LiveBid.com, a provider of live-event auctions on the A related agreement provides for Audible to pay the Internet, and Exchange.com, an online marketplace for company $30 million over a three year period for used books. In June 1999, the company announced a ten access to Amazon.com customers. year alliance with Sotheby’s to launch a joint online • Greenlight.com. The company owns a 5% stake in auction site, sothebys.amazon.com -- which provides an this online auto purchasing service and inked an Internet marketplace for collectibles and general art and agreement in January 2000 which provides for enables antiques dealers to reach Amazon.com customers. Greenlight.com to pay $82.5 million over a five year period for access to Amazon.com customers. • Pets.com. The company owns a 30% stake in this online pet store after investing $58 million between April and November 1999. • drugstore.com. The company owns a 24% stake in this personal and health products retailer after investing $40 million between February 1999 and January 2000 and providing technology and promotional services. A related marketing agreement provides for drugstore.com to pay the company $105 million -- including an initial payment of $30 million - - over a three year period for access to Amazon.com customers. • Gear.com. The company purchased a 49% stake in this online discounter of brand-name sporting goods in July 1999. • HomeGrocer.com. The company owns a 28% stake in this online grocery-shopping and home-delivery service after investing $42.5 million in May 1999. • Kozmo.com. The company purchased a 28% stake in this one-hour delivery service for entertainment and

Ameritrade Ameritrade Customer Account Home Page Ameritrade Holding Corp. 4211 South 102nd Street Omaha, NE 68127, U.S.A. Tel. 402-331-7856 Fax 402-597-7789

Unique Visitors (March 2000): 1,867,000 Reach: 2.8% Rank: 311

ORGANIZATION Business Sector: Banking/Brokerage/Financial services Founded: 1971 Employees: 2,369 total (600 (approx.) IT staff) Offline Activity Storefronts: None Catalogs Mailed: None MARKETING Facilities: • Media: Television advertising, business periodical Omaha, NE headquarters advertising, newspaper advertising, direct mail • Bellevue, NE operations center Partnerships: • Ft. worth, TX operations center • America Online (Proprietary dial-up service) • Baltimore, MD technology development center • America Online (www.compuserve.com) • Kansas City, MO back-up data center • Prodigy Services Corp. (www.prodigy.com) • White Plains, NY corporate office • Excite@Home (www.excite.com) Telecenter: Two in-house call centers with 800+ full-time • Intuit Inc. (www.quicken.com) equivalent representatives • MarketWatch.com Inc. (www.marketwatch.com) Ownership: Public • Microsoft Corp. (investor.msn.com) Trading Symbol: AMTD (NASDAQ) • Major Shareholders: TheStreet.com (www.thestreet.com) • • J. Joe Ricketts, Chairman and CEO Yahoo! Inc. (www.yahoo.com) • Shareholder Equity: $309.993 million (3/31/00) Intuit Inc. (link with Quicken) • Profitable: No ($18.509 million loss for six months ending Microsoft Corp. (link with MS Money) 3/31/00) Affiliates Program: None

WEBSITE OVERVIEW MANAGEMENT Website: www.ameritrade.com J. Joe Ricketts, Chairman and Chief Executive Officer - Related Sites: www.accutrade.com, www.amerivest.com, Ameritrade Holding Corp. www.amtd.com, www.advancedclearing.com Jack McDonnell, President Site Launch: August 1994 James Ditmore, Chief Information Officer Site Type: Business-to-consumer J. Peter Ricketts, Senior Vice President of Marketing and Business Model: Commission-based Sales Site Size: U.S. stocks, options, treasury securities, listed Peter D. Horst, Vice President, Marketing corporate bonds, and 7,800 mutual funds from 400 fund families INTERNET INFRASTRUCTURE Languages: English Design Consultants: None Accepts Advertising: No Site Maintenance: In-house staff Site Features: General help and contextual help Hosting Arrangement: On-site server(s) Back-end Integration: Access to customer account Access Provider: UUNET/MCI Worldcom, AT&T information, transaction history, transaction processing, CERFnet and transaction status integrated into website. Internet Connectivity: Multiple DS-3 lines Mirror Locations: One Hardware Platform: Sun Microsystems

8 copyright  2000 by The Intermarket Group The eCommerce Almanac

Operating System: Solaris UNIX COMMENTS Web Server Software: Apache/Stronghold Ameritrade is the largest operating unit of Ameritrade Commerce Platform: Proprietary; Ameritrade Operating Holding Corp. Ameritrade Holding also operates System (ATOS) Accutrade -- another online broker -- Advanced Clearing, Web Servers: Multiple Sun Ultra 4000 and Enterprise and AmeriVest. The company was formed in 1997 when 10000 servers Ameritrade Holding combined the accounts of Ceres Database Platform: Oracle Securities, K. Aufhauser & Company, and the eBroker Database Servers: Multiple Sun Ultra 4000 and Enterprise division of All American Brokers. 10000 servers Total revenue for the six months ending March 31, Personalization: Ameritrade Operating 2000 were $281.16 million with a loss of $18.51 million. System (ATOS) More than 453,000 new customer accounts were added Affiliate Management: Not used during the half -- at an average acquisition cost of $250.00 Transaction Processing: Ameritrade Operating System each -- and total accounts (net of closures) reached (ATOS) 992,000 at the end of the period. Other Applications: BEA Systems Tuxedo middleware; The company owns a 7.1% minority interest in InterSystems Cache e-DBMS; Kana Solution customer Knight/Trimark Group, the leading wholesale market support; System Management ARTS SMARTS InCharge maker in U.S. equity securities. In 1998, the company also suite; InterVoice-Brite speech-enabled call automation provided funding for OnMoney.com, a personal financial system; Mercury Interactive Test Director, WinRunner, portal that enables customers to access multiple accounts Xrunner, and LoadRunner. from banks, securities brokers, mutual funds, insurance and mortgage brokers through a MyAccounts feature and OPERATING BENCHMARKS view consolidated account statements. The company Net Revenue1 worked with Vertical One, a subsidiary of S1 Corp., to 1999...... $268.4mn build the MyAccounts feature. 1998...... $134.9mn In August 1998, launched a secure electronic trade 1997...... $ 77.2mn confirmation option in partnership with PostX Corp. 1996...... $ 54.3mn In 1999, the company formed an alliance with Deutsche Bank in Germany, enabling it to offer the bank’s Customer Assets (end of period)2 customers access to trading in U.S. markets. The company 2000 (Q2) ...... $38.9bn also entered into an agreement with TROY Group in 1999 1999...... $22.9bn which enabled it to offer rapid account opening and 1998...... $11.4bn funding by new customers. 1997...... $ 7.3bn In October 1999, the company partnered with Sprint 1996...... $ 4.0bn PCS to provide wireless two-way transactional access to account information, online trading, and stock alerts using Customer Accounts (end of period)2 the Sprint PCS Wireless Web. 2000 (Q2) ...... 992,000 In November 1999, the company launched a new online 1999...... 560,000 investment bank -- Epoch Partners -- in partnership with 1998...... 306,000 TD Waterhouse Group, Charles Schwab & Company, 1997...... 98,000 KPCB Holdings, Trident Capital Management, and 1996...... 52,000 Benchmark Capital Partners. Epoch will focus its activities on information technology and Internet Transactions (avg. trades per day) 1 companies. 2000 (Q2) ...... 149,091 In December 1999, announced agreement with 1999...... 49,305 MicroStrategy to develop a suite of financial service 1998...... 18,407 offerings, including personalized investor information 1997...... 6,571 available by cellular telephone, pager or e-mail. 1996...... 3,670

Advertising Expenditures1 1999...... $59.72mn 1998...... $43.61mn 1997...... $13.97mn 1996...... $ 7.54mn

1. Fiscal year October 1 – September 30. 2. Core brokerage accounts at end of period. copyright  2000 by The Intermarket Group 9 The eCommerce Almanac

AMP Electronic Commerce AMP Home Page AMP Inc. 441 Friendship Road Harrisburg, PA 17111, U.S.A. Tel. 717-564-0100

Unique Visitors (March 2000): n/a Reach: n/a Rank: n/a

ORGANIZATION Business Sector: Electronic parts and equipment Founded: 1941 Employees: 45,000 total Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Harrisburg, PA headquarters • 200+ manufacturing, warehouse, distribution and sales facilities in the U.S. and 50 other countries Telecenter: In-house call centers Ownership: Private Trading Symbol: None Major Shareholders: Wholly-owned subsidiary of Tyco International Ltd. (NYSE: TYC) Profitable: Yes

WEBSITE OVERVIEW INTERNET INFRASTRUCTURE Design Consultants: Ft. Point Partners Website: www.amp.com, connect.amp.com, Site Maintenance: In-house staff ecommerce.amp.com Hosting Arrangement: On-site server(s) Site Launch: January 1996 Access Provider: AT&T Site Type: Business-to-business Business Model: Fixed pricing Internet Connectivity: One shared DS-3 line Site Size: 90,000 (approx.) part numbers Mirror Locations: None Hardware Platform: IBM, Sun Microsystems Accepts Advertising: No Operating System: Windows NT, Solaris Languages: English, German, Spanish, French, Italian, Web Server Software: Microsoft IIS 4.0, Netscape Chinese, Korean, Japanese Site Features: General help, contextual help, foreign Enterprise Server 2.01 language product information and order pages Commerce Platform: IBM Net.Commerce Merchant Back-end Integration: Access to customer account Server Web Servers: Two IBM RS/6000 servers information, inventory availability, and order status are Database Platform: Oracle 7; links to IBM DB2 legacy integrated into website. database Database Servers: One Sun server running Step Search MARKETING Media: Business periodical advertising, direct mail links to mainframe legacy database Personalization: Not used Partnerships: None Affiliate Management: Not used Affiliates Program: None Payment Processing: Not used Other Applications: SAQARRA Systems Step Search MANAGEMENT Jim Kessler, Director-Global Electronic Commerce

10 copyright  2000 by The Intermarket Group The eCommerce Almanac

COMMENTS AMP Inc. is the world’s leading supplier of electrical Art.com Inc. th and electronic connectors and interconnection systems. 122 South Michigan Avenue, 10 Floor The company’s commerce site is built around a catalog of Chicago, IL 60603, U.S.A. more than 90,000 part numbers and employs a parametric Tel. 312-360-0100 search capability that enables users to navigate search results using high-resolution graphics, 3-D models, and Fax 312-360-1112 product charts that illustrate side-by-side comparisons of up to five similar products. The site provides a real-time Unique Visitors (March 2000): 570,000 link to AMP’s ERP system enabling users to retrieve real- Reach: 0.8% time standard or contract pricing information for each part Rank: 1,108 number as well as its availability from every participating distributor. Site content includes technical drawings, ORGANIZATION specifications, test reports, 3-D models, printed circuit Business Sector: Other (Art) board layouts and panel cutouts, assembly sub-contractor Founded: 1997 referrals, and links to distributor referrals. Employees: 100+ The AMP website is available in English and seven Offline Activity foreign languages. It was also among the first large-scale Storefronts: None commerce sites to offer complete multi-lingual support. Catalogs Mailed: None In March 2000, the company eliminated a requirement Facilities: that users register before they were able to access the • Chicago, IL headquarters online catalog. At that point in time, there were more than • Lake Forest, IL customer service and distribution 200,000 registered users and the site averaged more than center 22,000 unique visitors per month. Telecenter: In-house call center Ownership: Private Trading Symbol: None Major Shareholders: Wholly-owned subsidiary of Getty Images Inc. (NASDAQ: GETY) Shareholder Equity: $745.69 million (Getty Images) Profitable: No

WEBSITE OVERVIEW Website: www.art.com Site Launch: May 1998; Publicly launched March 1999 Site Type: Business-to-business, Business-to-consumer Business Model: Fixed-pricing, Negotiated Pricing/Auctions Site Size: 31,000 products SKUs (29,000 prints and posters, 2,000 fine art pieces, and 450 gifts) Languages: English Accepts Advertising: No Site Demographics: 35% male/55% female; 80% college educated; 50% married; $50,000+ average household income; average age, 37.5 years Site Features: General help, contextual help, online real- time customer service Back-end Integration: Access to customer account information, order history, product availability, order processing, payment processing and order status are integrated into the website.

MARKETING Media: Radio advertising, newspaper advertising, consumer and business periodical advertising, direct mail. Partnerships: • Amazon.com Inc. (www.amazon.com)

• America Online Inc. (proprietary dial-up service) Art.com Home Page • America Online Inc. (www.aol.com) • America Online Inc. (www.netscape.com) • America Online Inc. (www.compuserve.com) • Hearst Communications (www.homearts.com) • giftpoint.com (www. giftpoint.com) • iVillage, Inc. (www.ivillage.com) • Office Depot, Inc. (www.officedepot.com) • Women.com Networks (www.astronet.com) • Women.com Networks (www.women.com) • Yahoo Inc. (www.yahoo.com) Affiliates Program: Art.com Affiliates Program No. of Affiliates: 17,000 Commission Rate: 15% plus 2% of additional sales within 90 days of first purchase

MANAGEMENT Bill Lederer, Chief Executive Officer. Founded and currently heads Minotaur Capital Management, an Illinois- based investment firm, previously served as vice president of research at Sound Shore Management and as a securities analyst and portfolio manager for Management Asset Corporation. B.A. in business from Roosevelt University in Chicago. Don Fosen, Chief Information Officer and Vice President. Previously served as a programmer analyst for the Circuit Court Clerk of Dupage County, as a consultant at various companies such as Software Architects, Sears, and the National Futures Association (NFA), and as a project manager and then director of sales systems development for Ameritech Cellular. B.S. in computer information systems and M.B.A. from Benedictine University. Application Servers: Three Michael Kahn, Vice President of Marketing. Previously Database Platform: Microsoft SQL Server 7.0 served as vice president of consumer marketing and Database Servers: Five franchise sales for The Great Frame Up and served in Personalization: Net Perceptions GroupLens various positions at advertising agencies such as J. Walter Recommendation Engine Thompson, Mitchiner Ross & Kahn (where he was partner Affiliate Management: Be Free BFAST and president), Campbell-Mithun-Esty and DDB Payment Processing: Signio Needham. B.A. in journalism from the University of Other Applications: Microsoft Passport Wisconsin at Madison. COMMENTS INTERNET INFRASTRUCTURE Art.com specializes in selling matted and framed art Design Consultants: Design One prints and posters to consumers and small business. The Site Maintenance: In-house staff and outside consultants company was originally funded by SOFTBANK, Hosting Arrangement: On-site and co-located servers Benchmark Capital, and Sandler Capital. In May 1999, Internet Connectivity: 3 T-1 lines Getty Images, Inc. (NASDAQ: GETY) acquired the Access Providers: InterNAP, Level 3, UUNET/MCI company for $200 million in Getty common stock (4.25 Worldcom million shares) and contributed an additional $10 million Mirror Locations: None in capital to the company. Getty has since combined Hardware Platform: Dell PowerEdge servers with Intel Art.com with American Royal Arts -- a marketer of 450mHz and 500mHz processors collectibles and animation art -- to create its Consumer Operating System: Windows NT Division. Web Server Software: Microsoft IIS 4.0 Commerce Platform: Microsoft Site Server Commerce Edition Web Servers: Four

12 copyright  2000 by The Intermarket Group The eCommerce Almanac

Ashford.com, Inc. Ashford.com Home Page 3800 Buffalo Speedway, Suite 400 Houston, TX 77098, U.S.A. Tel. 713-369-1300 Fax 713-623-0444

Unique Visitors (March 2000): 432,000 Reach: 0.6% Rank: 1,464

ORGANIZATON Business Sector: Gifts/Jewelry Founded: March 1998 Employees: 70+ Offline Activity Storefronts: One Catalogs Mailed: None Facilities: Houston, TX headquarters and fulfillment center Telecenter: None Ownership: Public Trading Symbol: ASFD (NASDAQ) Major Shareholders: • Benchmark Capital (35%) • Amazon.com Inc. (17%) • J. Robert Shaw, Chairman (10%) • James Whitcomb, Jr., COO (10%) • Sequoia Capital (8%) • America Online (www.netcenter.com) • Markas Holding (8%) • America Online (www.compuserve.com) • Kenneth Kurtzman (6%) • Amazon.com Inc. (www.amazon.com) Financing: $257 million in 3 rounds and IPO • Earthlink Inc. (www.wizshop.com) Profitable: No ($72.06 million loss for FY ‘00) • FedEx Marketplace (www.fedex.com) • New York Times Company (www.nytimes.com) WEBSITE OVERVIEW • USA Today Online (www.usatoday.com) Website: www.ashford.com • Yahoo! Inc. (www.yahoo.com) Site Launch: April 1998 Affiliate Program: Ashford.com Affiliate Program Site Type: Business-to-consumer, business-to-business Number of Affiliates: 2,000+ Business Model: Fixed pricing Commission Rate: 5% of purchase value Site Size: 14,000 SKUs from 30 different brands Languages: English Accepts Advertising: No MANAGEMENT Kenneth Kurtzman, Chief Executive Officer. Previously Site Features: General help, real-time online customer served as vice president and general manager of several service Back-end Integration: Access to inventory availability, divisions of Compaq Computer Corp., including the Small and Medium Business Division and Compaq.com, and as a order processing, payment processing, order status, and Principal at McKinsey & Company working in the shipment tracking are integrated into the website. computing, telecommunications, systems integration, banking and energy industries. B.A. in Economics from MARKETING Rice University and M.B.A. from Stanford University. Media: Newspaper advertising; broadcast radio and television advertising, consumer periodical advertising, Bill Hensler, Chief Operating Officer. Previously held various positions at Compaq Computer Corp., including and direct mail are planned vice president of the Small and Medium Business Division Partnerships: and vice president of quality for the PC Products Group, • America Online (proprietary dial-up service) directed Coopers & Lybrand's Total Quality Center of • America Online (www.aol.com) Excellence, and held positions as vice president at Qualtec copyright  2000 by The Intermarket Group 13 The eCommerce Almanac

Quality Services and director of quality improvement at OPERATING BENCHMARKS Florida Power and Light. Total Revenue1 James Whitcomb, Jr., Chief Information Officer. 2000 Q4...... $11.8mn Previously served as vice president and chief technology 2000 Q3...... $20.1mn officer at Synergy Development Corp. B.A. in Accounting 2000 Q2...... $ 4.4mn from the University of Texas. 2000 Q1...... $ 3.6mn David Gow, Vice President, Finance and Chief Financial 1999...... $ 3.6mn Officer. Previously served as director of strategic planning at Compaq Computer Corp. and as a consultant with Marketing Expenditures1 McKinsey & Co., serving the technology, energy, banking 2000 Q4...... $10.5mn and retail industries. B.A. in Economics from Williams 2000 Q3...... $16.1mn College and M.B.A. from the Kennedy School of 2000 Q2...... $ 5.6mn Government at Harvard University. 2000 Q1...... $ 2.4mn James Gerber, Vice President of Business Development. 1999...... $ 1.0mn Previously served in various positions at Clarify, Inc., most recently as Southwestern Branch Manager. B.A. in Total Customers1 Political Economy of Industrial Societies from the 2000 Q4...... 96,157 University of California at Berkeley and M.B.A. from 2000 Q3...... 66,120 Stanford University. 2000 Q2...... 26,971 Mary Lou Kelley, Vice President of Marketing. 2000 Q1...... 18,866 Previously served as director of product marketing at Ben 1999...... 12,274 & Jerry's Homemade, Inc. and as a consultant for McKinsey and Company in Houston, Dallas, Boston and Repeat Customers1 New York. B.A. in economics from Boston College and 2000 Q4...... 25% M.B.A. from the University of Virginia. 2000 Q3...... 22% Jeff Whatcott, Director of Business Development 1999...... n/a Darrell Starnes, Director of Systems Infrastructure 1. Fiscal year ending March 31 INTERNET INFRASTRUCTURE Design Consultants: Synergy Development Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Insync Internet Services Mirror Locations: None Hardware Platform: Compaq ProLiant Operating System: Microsoft Windows NT Web Server Software: Microsoft IIS 4.0 Commerce Platform: Microsoft Site Server Commerce Edition Web Servers: Multiple ProLiant 1850 dual Pentium servers Database Platform: Microsoft SQL Server 6.5 and 7.0 Database Servers: Multiple ProLiant 1850 dual Pentium servers Personalization: Not used Affiliate Management: Be Free BFAST Payment Processing: CyberSource Other Applications: Accuity chat software, Microsoft Passport, Broadbase customer analysis software

14 copyright  2000 by The Intermarket Group The eCommerce Almanac

autobytel.com inc. autobytel.com Home Page 18872 MacArthur Boulevard, Second Floor Irvine, CA 92612, U.S.A. Tel 949-225-4500

Unique Visitors (March 2000): 1,000,000 Reach: 1.5% Rank: 671

ORGANIZATION Business Sector: Automobiles/Auto Parts Founded: February 1995 Employees: 225+ Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Irvine, CA headquarters Back-end Integration: Access to customer account • San Ramon, CA CarSmart.com offices information, inventory availability, and payment Telecenter: None processing are integrated into website. Ownership: Public Trading Symbol: ABTL (NASDAQ) MARKETING Major Shareholders: Media: Television advertising, business and consumer • GE Capital Services periodical advertising • National Union Fire Insurance Company (subs. Of Partnerships: American International Group Inc.) • Alta Vista Company (www.altavista.com) • Inchcape Motors International PLC • Edmunds.com Inc. (www.edmunds.com) • ContiTrade Services • Excite@Home Inc. (www.excite.com) • National Broadcasting Company (NBC) • AT&T Worldnet (www.att.net) • Bilia AB • NBC Internet (www.snap.com) • Invision AG • NBC Internet (www.nbci.com) • Aureus Private Equity AG • NBC Internet (www.xoom.com) • MediaOne Interactive Services • Kelley Blue Book (www.kbb.com) • Michael Fuchs • Go Network (www.go.com) Financing: $141.96 million in three rounds and IPO Affiliates Program: Autobytel.com AutoPartner Program Profitable: No ($23.320 million loss for FY ’99) Number of Affiliates: n/a Commission Rate: $1.50 - 3.00 per purchase request WEBSITE OVERVIEW Website: www.autobytel.com, www.autobytel.ca, MANAGEMENT www.autobytel.co.uk, www.autobytel-japan.com, Mark Lorimer, President and CEO www.autobytel.se, www.carsmart.com Ann Marie Delligatta, Executive Vice President and Site Launch: March 1995 Chief Operating Officer Site Type: Business-to-consumer Robert S. Grimes, Executive Vice President Business Model: Fee-based Hoshi Printer, Senior Vice President and Chief Financial Site Size: 684 basic models from 55 manufacturers Officer Languages: English, Swedish, Japan David Grant, Chief Technology Officer Accepts Advertising: No Josh McCarter, Vice President, International Site Demographics: 77% male/23% female; 57% college Development graduates; average age range 25-54 years; $65K average Jason Tuschman, Vice President Consumer Products and household income Website Development Site Features: General help, contextual help, foreign Glen Caffey, Vice President, Service Products language product information and order pages

INTERNET INFRASTRUCTURE The company’s business model is based primarily on Design Consultants: None fee income from participating dealers who pay an initial Site Maintenance: In-house staff subscription fee plus an ongoing monthly fee which Hosting Arrangement: On-site server(s) averaged $1,045 during 1999. Many dealers also Access Provider: Sprint Corp. participate in the AutobytelDIRECT program which costs Internet Connectivity: DS-3 line $100 and $300 per vehicle sold, based on the gross selling Mirror Locations: None price. In the first quarter of 2000, the company reported Hardware Platform: Compaq Computer $15.1 million in revenue and a loss of $8.1 million. The Operating System: Windows NT share of first quarter revenue from international fees and Web Server Software: Microsoft IIS 4.0 from services -- such as financing and insurance -- was Commerce Platform: Proprietary applications 20% compared to 15% in the previous quarter. Web Servers: Twenty Compaq ProLiant 1850R servers During 1999, the company launched a consumer Database Platform: Microsoft SQL Server 7 banking center in partnership with LendingTree and Credit Database Servers: Compaq ProLiant 5000 servers Management Solutions; financing is also available through Personalization: Not used E-LOAN’s CarFinance.com. An insurance center provides Affiliate Management: Proprietary applications real-time quotes from eCoverage, Esurance, Avomark Payment Processing: Signio Insurance Company, and InsurQuote Systems. Extended Other Applications: Allaire Cold Fusion, Iconomy.com warranty products are offered through a partnership with storefront software Fireman's Fund. An online automotive superstore was launched in OPERATING BENCHMARKS December 1999, enabling customers to purchase parts, Total Revenue accessories, tires, audio and electronics, car care products, 1999...... $40.30mn tools, books and magazines. Partners include 1998...... $23.83mn Wrenchead.com, CarParts.com, Crutchfield, 1997...... $15.34mn Automotive.com, Autoaccessory.com, TireRack.com, 1996...... $ 5.03mn 1StopTools.com, and Amazon.com In January 2000, launched AutobytelDIRECT, a direct- Marketing Expenditures to consumer vehicle purchasing service that provides real- 1999...... $44.18mn time online access to new vehicles, instant up-front 1998...... $30.03mn pricing, multiple trade-in options, financing, and at-home 1997...... $21.45mn or office delivery. Approximately 1,100 dealers were 1996...... $ 7.79mn participating in the program at the end of March 2000 In February 2000, the company formed a Business Development Expenditures Auction Systems Unit (wholesale.autbytel.com) which 1999...... $14.26mn provides online wholesale auction services to dealers 1998...... $ 8.53mn purchasing and selling new and used vehicles. A web- 1997...... $ 5.45mn based vehicle service site was launched in the same month 1996...... $ 1.75mn at service.autobytel.com. The company acquired A.I.N. Corp. and its Vehicle Purchase Requests CarSmart.com site in February 2000 for 1.8 million shares 1999...... 2,065,000 of autobytel.com common stock and $3 million in cash. 1998...... 1,300,000 At the time of purchase, CarSmart.com had relationships 1997...... 761,000 with approximately 1,500 dealers, more than 200 credit 1996...... 345,000 unions and marketing agreements with ten leading portals, including AOL.com, Alta Vista, Snap.com, G02Net and COMMENTS the Go Network. autobytel.com operates one of the leading web The company has aggressively expanded its business properties for consumer car buyers. The company was into international markets. In June 1999, Autobytel Japan recognized by Computerworld as one of the “Premier 100 KK was announced in partnership with ITOCHU Corp., IT Leaders” in May 2000. The autobytel.com websites Intec, e-solutions, Recruit Co., Orient Corp., 11 12 enable consumers to purchase new and pre-owned vehicles TransCosmos and GE Capital. The Japanese site was through its network of more than 5,000 dealers, direct launched in November 1999. In January 2000, the through AutobytelDIRECT, or through consumer-to- formation of Autobytel.Europe was announced in consumer and dealer-to-consumer online auctions. partnership with Inchcape PLC, Pon Holdings B.V., GE Information and services are also provided vehicle Capital, and e-LaSer. Autobytel.Europe plans to license, financing, insurance, and maintenance. invest in, and offer services to local partners throughout

16 copyright  2000 by The Intermarket Group The eCommerce Almanac

Europe who will tailor the Autobytel.com offerings to national markets. Sites in the U.K. and Sweden were autoweb.com launched in April 1999; sites for Denmark, Norway and 3270 Jay Street, Building 6 Finland are expected to launch in 2000. The company also Santa Clara, CA 95054, U.S.A intends to sign licensing agreements in Germany, France, Tel. 408-970-9100 Spain, Portugal and Italy. In February 2000, the company formed Autobytel Australia in partnership with St. George Fax 408-588-9782 Bank Ltd., Trading Post, Astre Automotive, RACV (Royal Automobile Club of Victoria), Fortis Insurance and Unique Visitors (March 2000): 2,202,000 Strathfield E-Ventures. Reach: 3.3% The company has a wholly-owned Canadian subsidiary, Rank: 246 Autobytel.ca inc., that was launched in 1998 and had relationships with approximately 170 dealers at the end of ORGANIZATION February 2000. Business Sector: Automobiles/Auto Parts Founded: 1994 Employees: 218 (84 product development staff) (12/31/99) Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Santa Clara, CA headquarters • Westborough, MA • Los Angeles, CA • Atlanta, GA Telecenter: In-house call center Ownership: Public Trading Symbol: AWEB (NASDAQ) Major Shareholders: • Geocapital Partners • Technology Crossover • Farhang Zamani • Payam Zamani Financing: $104.2 million Profitable: No ($18.153 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.autoweb.com Site Launch: April 1995 Site Type: Business-to-consumer Business Model: Commission-based Site Size: 241 basic models from 43 manufacturers Languages: English Accepts Advertising: Yes Site Demographics: 56% male/44% female, 34.4% college educated, $65,000 average household income, average age 39 years old Site Features: General help, contextual help, online real- time customer service, customer created content; IP telephony and real-time customer-to-customer chat are planned Back-end Integration: Access to customer account information, customer order history, and payment processing are integrated into website.

MARKETING autoweb.com Home Page Media: Television advertising and direct mail; Radio advertising, newspaper advertising, and consumer and business periodical advertising are planned Partnerships: • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.netscape.com) • America Online (www.digitalcities.com) • CarsDirect.com (www.carsdirect.com) • Citibank (www.citibank.com) • Lycos, Inc. (www.lycos.com) • iWON, Inc. (www.iwon.com) • Wired Digital Inc. (www.hotbot.com) • Yahoo!, Inc. (www.yahoo.com) Affiliates Program: Autoweb.com Affiliate Program No. of Affiliates: 5,000+ Commission Rate: $5.00 per used car ad placement and $6.00 per purchase request

MANAGEMENT Dean DeBiase, Chairman and Chief Executive Officer OPERATING BENCHMARKS Sam Hedgpeth, President and Chief Operating Officer Total Revenue Thomas Stone, Chief Financial Officer 1999...... $32.8mn Jerry Karr, Chief Technology Officer 1998...... $13.0mn Cathy Gordon, Vice President, Product Development 1997...... $ 3.5mn David Green, Vice President, Dealer Training Fred Ruffin, Vice President, Human Relations Marketing Expenditures Jim Wolfe, Vice President, Marketing 1999...... $33.2mn Cheryl Patstone, Vice President, Public Relations 1998...... $13.0mn 1997...... $ 3.5mn INTERNET INFRASTRUCTURE Design Consultants: Razorfish Product Development Expenditures Site Maintenance: In-house staff 1999...... $5.10mn Hosting Arrangement: Co-located server(s) 1998...... $0.59mn Access Provider: Exodus Communications 1997...... $0.33mn Mirror Locations: None Hardware Platform: Intel Pentium COMMENTS Operating System: Windows NT Autoweb.com operates one of the leading websites for Web Server Software: Microsoft IIS 4.0 consumers car buyers. The site provides a combination of Commerce Platform: Proprietary applications research resources, shopping tools, and support services Web Servers: Multiple Dell and Micron servers for car buyers and owners. The company also provides Database Platform: Microsoft SQL Server 6.5 web hosting and development services and sales Database Servers: Multiple Dell and Micron servers automation services to vehicle manufacturers and dealers. Personalization: Not used More than 5,000 car dealers participate in the company’s Affiliate Management: Proprietary application online shopping service. Payment Processing: Not used Member dealers were originally charged a flat monthly Other Applications: Net.Genesis Net.Analysis, subscription fee in exchange for receiving consumer NetAcumen log analysis software, Checkpoint firewall purchase inquiries originated through the Autoweb.com software, Octane Software Internet Relationship site. The pricing model was changed in February 1998 Management (iRM) software. because the number of leads received by dealers varied

18 copyright  2000 by The Intermarket Group The eCommerce Almanac widely so dealers now pay for each qualified purchase inquiry. BabyCenter Inc. The Autoweb.com site enables member dealers and 163 Freelon Street category partners to manage their presence on the site, San Francisco, CA 94107, U.S.A. including adding, modifying or updating their pre-owned Tel. 415-537-0900 car inventory listings; upload pictures of pre-owned cars; view their customer information; and generate reports Fax 415-537-0909 based on their customers' survey responses. In February 1997, the company began negotiating Unique Visitors (March 2000): 1,212,000 partnerships to offer automotive-related services through Reach: 1.8% its site. Current category partners include Intuit’s Quicken Rank: 459 InsureMarket, CarFax Vehicle Histories, Canada Trust, PeopleFirst.com, GE Auto Warranty Services, and ORGANIZATION CarParts.com. In August 1999, the company launched a Business Sector: Books; Clothing; Music/Videos; real-time Internet vehicle service center, enabling Toys/Sporting Goods; Baby Products customers to set service appointments with local a local Founded: 1997 dealer or repair facility. Employees: 125 An online auction service for used cars was added in Offline Activity October 1999 as part of the site’s used auto classified Storefronts: None channel. In March 2000, the auction service was Catalogs Mailed: None expanded, enabling consumers to also bid on brand new Facilities: San Francisco, CA headquarters cars. Telecenter: In-house call center In July 1999, acquired SalesEnhancer.com, an Internet- Ownership: Private based support service that enables auto dealers to manage Trading Symbol: None purchase inquiries by tracking potential buyers from the Major Shareholders: Wholly-owned subsidiary of eToys, Internet, telephone, walk ins, or direct mail; instantly alert Inc. (NASDAQ: ETYS) them to consumer requests; automate responses; and Financing: $13.3 million in two rounds compile customer profiles. Profitable: No The company acquired Automotive Information Center (AIC) from Thomson Corp.'s Gale Group in September WEBSITE OVERVIEW 1999 for $20 million in cash and stock. AIC’s Website: www.babycenter.com AutoSite.com offers a 20,000-page online vehicle buyer's Site Launch: November 1997 (website), October 1998 guide and a suite of related services and information to (storefront) consumers, manufacturers and the media. Site Version: 3.0 In March 2000, the company announced an agreement Site Type: Business-to-consumer with CarsDirect.com to launch a co-branded direct buying Business Model: Fixed-pricing service on Autoweb.com as well as to place links between Site Size: 10,000 (approx.) product SKUs the two company's sites, and to license data content and Languages: English tools. The companies also agreed to work together as Accepts Advertising: Yes infrastructure partners on future product development. Site Demographics: 10% male/90% female; 85% college In April 2000 Lycos Inc. purchased a 10% stake in the educated; 90% married; $50-60,000 average household company for approximately $10 million and the two income; average age, 25-29 years companies signed a four-year agreement to co-produce a Site Features: General help, threaded discussions, real- new car buying resource for the Lycos website. Both time customer-to-customer chat, and customer-created companies will split the advertising and transaction content revenues generated by the site. Back-end Integration: None The company announced a four-year agreement with America Online in May 2000, under which MARKETING Autoweb.com’s content and new configuration and Media: Consumer periodical advertising and direct mail comparison services will be integrated into the automotive advertising. Broadcast television and radio broadcast areas across all of AOL’s various online properties. advertising planned.

Partnerships: BabyCenter BabyStore Home Page • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.netscape.com) • America Online (www.compuserve.com) • Buena Vista Internet-Disney (www.family.com) • Buena Vista Internet-Disney (www.go.com) • Excite@Home (www.excite.com) • Inktomi Corp. (Inktomi Shopping Engine) Affiliates Program: BabyCenter Affiliates Program No. of Affiliates: n/a Commission Rate: 15%

MANAGEMENT Mari Baker, Senior Vice President and General Manager Brian Laliberte, Chief Information Officer Steve Fram, Vice President of Engineering Greg Goff, Vice President of Marketing Colleen Hancock, Vice President of Merchandising

INTERNET INFRASTRUCTURE Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Providers: SAVVIS Communications Internet Connectivity: 100Mbps Mirror Locations: None Hardware Platform: Sun Microsystems Operating System: Solaris Web Server Software: Netscape Enterprise 3.6, Stronghold Apache Commerce Platform: Art Technology Dynamo Application Server Web Servers: Multiple Sun Enterprise servers Database Platform: Oracle 8 Database Servers: Multiple Sun Enterprise servers Personalization: Art Technology Dynamo Application Server Affiliate Management: Be Free BFAST Payment Processing: CyberCash Other Applications: RedCart Universal Shopping Cart

OPERATING BENCHMARKS Registered Users (end of period) 1999...... 225,000 1998...... 100,000 1997...... 10,000 eToys for approximately $150 million in eToys common stock. COMMENTS The company’s Consumer Health Interactive (“CHI”) BabyCenter operates a content site and online storefront division was sold in December 1999 for $20 million in catering to the information and product needs of new and cash and securities to an investor group led by J.H. expectant parents. The company’s original investors Whitney & Co. and Advance Paradigm, Inc. (Nasdaq: include Bessemer Venture Partners, Broderbund Software, ADVP). The CHI unit assists companies such as Blue Crystal Internet, IDG Ventures, Intel Corp., and Trinity Shield of California and Blue Cross Blue Shield of Ventures. In April 1999, BabyCenter was acquired by Massachusetts with using the Internet to attract and retain members.

20 copyright  2000 by The Intermarket Group The eCommerce Almanac

In February 2000, eToys announced plans to combine the Baby Store on its own website with BabyCenter and BarnesandNoble.com Inc. operate the businesses under the BabyCenter brand. The 76 Ninth Avenue eToys Baby Store tab now directs customers to the New York, NY 10011, U.S.A. BabyCenter online store. eToys also plans to move all of Tel. 212-414-6000 the BabyCenter commerce-related functions, such as distribution and customer service, into its own Southern Fax 212-414-6150 California facilities from BabyCenter’s San Francisco offices during the summer of 2000. In addition, the two Unique Visitors (March 2000): 5,401,000 companies plan to shift individuals involved with other Reach: 8.0% overlapping functions into eToys’ offices within the same Rank: 72 time frame. ORGANIZATION Business Sector: Books, CDs/Videos/DVDs Founded: 1996 Employees: 1,237 Offline Activity Storefronts: 942 (operated by Barnes & Noble, Inc.) Catalogs Mailed: None Facilities: • New York, NY corporate offices • Northern New Jersey customer service facility • Jamesburg, NJ distribution facility • Memphis, TN distribution facility • Reno, NV distribution facility Telecenter: In-house call center Ownership: Public Trading Symbol: BNBN (NASDAQ) Major Shareholders: • Barnes & Noble, Inc. (40%) • Bertelsmann AG (40%) Financing: $670 million Profitable: No ($102.41 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.barnesandnoble.com, www.bn.com Site Launch: May 1997 Site Type: Business-to-consumer, business-to-business Business Model: Fixed pricing Site Size: One million in-print book titles, 15 million out- of-print items, 200,000 music CDs, 2,000 software titles, 1,000 magazine titles, 2,000 eCards, and 9,500 print images Languages: English Accepts Advertising: No Site Features: General help, one-click ordering/quick buy, customer created content Back-end Integration: Access to customer account information, order history, inventory availability, order processing, payment processing, order status, and shipment tracking integrated into website.

MARKETING BarnesandNoble.com Home Page Media: Radio and television advertising, newspaper advertising, consumer and business periodical advertising Partnerships: • America Online (proprietary dial-up service) • America Online (www.compuserve.com) • Affinia Commerce Network (www.affinia.com) • L.L. Bean (www.llbean.com) • BOL Ltd. (www.bol.com) • J. Crew Group (www.jcrew.com) • Electronic Newsstand, Inc. (www.enews.com) • Expedia, Inc. (www.expedia.com) • GiftCertificates.com (www.giftcertificates.com) • giftpoint.com (www.giftpoint.com) • Go2Net, Inc. (www. siliconinvestor.com) • Go2Net, Inc. (www.hypermart.com) • Go2Net, Inc. (www.playsite.com) • Go2Net, Inc. (www.metacrawler.com) • Lycos, Inc. (www.lycos.com) • Lycos, Inc. (www.hotbot.com) • Microsoft Corp. (www.msn.com) • MyPoints.com Inc. (www.mypoints.com) • MyWay.com (www.myway.com) • Netcentives Inc. (www.clickrewards.com) • New York Times Company (www.nytimes.com) • 1-800-Flowers Inc. (www.1800flowers.com) • Oracle Corp. (www.oracleexchange.com) • PETsMART.com, Inc. (www.petsmart.com) • PlanetRx.com Inc. (www.planetrx.com) • Textbooks.com (www.textbooks.com) • theglobe.com inc. (www.theglobe.com) • ThirdAge Media Inc. (www.thirdage.com) • Ticketmaster Online Citysearch (www.ticketmaster.com) • USA Today (www.usatoday.com) • VitaminShoppe.com Inc. (www vitaminshoppe.com) • Winstar Communications (www.office.com) • ZDNet (www.zdnet.com) • Digital Marketing Services (AOL Rewards Program) • Inktomi Corp. (Inktomi Shopping Engine) • uniView Technologies Corp. (set-top Internet boxes) Affiliates Program: BN.com Affiliate Network No. of Affiliates: 360,000 Commission Rate: 5-7%

MANAGEMENT Stephen Riggio, Acting Chief Executive Officer. Also currently serves as vice chairman of Barnes & Noble, Inc. (NYSE: BKS). Previously served as chief operating officer of Barnes & Noble and as president of B. Dalton Bookseller, a subsidiary of Barnes & Noble.

22 copyright  2000 by The Intermarket Group The eCommerce Almanac

Marie Toulantis, Chief Financial Officer. Previously eFulfill software, i2 Technologies supply chain served as CFO of Barnes & Noble, executive vice management software president, finance of Barnes & Noble, and senior vice president of Chase Manhattan Bank. OPERATING BENCHMARKS Gary King, Chief Technology Officer. Previously served Total Revenue in various positions at Avon Products, including vice 1999...... $202.57mn president for global information technologies. 1998...... $ 61.83mn Carl Rosendorf, Senior Vice President, Marketing. 1997...... $ 11.95mn Previously founded and served as president of Cybersmith and as executive vice president of B&N College. Sales to Repeat Customers William Duffy, Vice President, Operations. Previously 1999...... 66% served as vice president-Finance of Barnes & Noble and as 1998...... 52% vice president and general manager of Marboro Books, a 1997...... n/a subsidiary of Barnes & Noble. Brenda Marsh, Vice President, Merchandising. Marketing Expenditures Previously served as senior vice president and then 1999...... $111.55mn president, sales and market development for the general 1998...... $ 70.42mn book group of HarperCollins Publishers. Also served in 1997...... $ 8.86mn various executive positions at Viking Penguin and St. Martin's Press. Development Expenditures Tom Simon, Vice President, Content Development 1999...... $21.01mn Michael Fragnito, Vice President, eBooks 1998...... $ 8.53mn 1997...... $ 3.26mn INTERNET INFRASTRUCTURE Design Consultants: Interactive Bureau LLC; i|o 360, Total Customers (end of period) Business Data Services 1999...... 4,700,000 Site Maintenance: In-house staff 1998...... 1,300,000 Hosting Arrangement: On-site server(s) and co-located 1997...... 250,000 server(s) Access Provider: Genuity Inc., UUNET/MCI Worldcom, COMMENTS Sprint Corp., Cable and Wireless, GlobalCenter, Winstar BarnesandNoble.com is the Internet’s second-largest Communications, and three other ISPs bookseller and a retailer of magazines, CDs, videos, Internet Connectivity: Multiple DS-3 and T-1 lines DVDs, prints and posters, and electronic greeting cards. Mirror Locations: One The company was formed in October 1998 as an equal Hardware Platform: Compaq ProLiant partnership between Barnes & Noble, Inc. (NYSE: BKS) Operating System: Windows NT 4 (web front-end), which contributed its existing online business and Windows 2000 (back-end systems) Bertelsmann AG which ultimately contributed $200 Web Server Software: Microsoft IIS 4.0 million in equity capital. Prior to that time, the online Commerce Platform: Microsoft Site Server Commerce activities of Barnes & Noble were run by a wholly-owned Edition; proprietary applications subsidiary, Barnes & Noble Online, Inc. In May 1999, the Web Servers: 30 Compaq ProLiant 6400 servers company raised approximately $484 million in an initial Application Servers: 30 Compaq ProLiant 6400 servers public offering (IPO). Database Platform: Microsoft SQL Server Gross revenue for the quarter ending March 31, 2000 Database Servers: Multiple Compaq ProLiant 8500 eight- was $78.22 million with a loss of $52.11 million. During way servers the same period, the company added more than 850,000 Personalization: Microsoft Site Server Personalization, new customers. proprietary applications The company can leverage its partnership with Affiliate Management: BeFree BFAST Bertelsmann through cross-marketing and co-promotion Payment Processing: Proprietary application programs targeting members of Bertelsmann’s U.S. book Other Applications: Microsoft Chat, Microsoft and music clubs. The company also outsources various Transaction Server, Microsoft Message Queue, CyberCash services to Barnes & Noble, including payroll processing, InstaBuy, Microsoft Passport, RedCart Universal Shopping benefits administration, insurance, and taxes. Cart, Kana Solution customer support, Accrue traffic A partnership between the company and analysis software, Red Brick Systems data warehouse BuyEnlarge.com Inc. enables customers to order any of tools, webMethods B2B, EXE Technology EXceed more than 9,500 images and have them printed on

copyright  2000 by The Intermarket Group 23 The eCommerce Almanac museum-quality canvas or high-quality paper for delivery on demand. Beyond.com Corp. In December 1999, the company launched B&N.com 3200 Patrick Henry Drive On the Go, a strategy which enables customers to shop at Santa Clara, CA 95054, U.S.A. the company’s online storefront through wireless devices Tel. 408-855-3000 such as the Palm VII handheld computer. In January 2000, the company announced a partnership Fax 408-327-6400 with Microsoft Corp. to create an online eBook store for the Microsoft Reader software. The company also Unique Visitors (March 2000): 1,423,000 acquired a 32% equity stake in online magazine Reach: 2.1% subscription retailer eNews.com in January for $26.4 Rank: 446 million in cash and $12.8 million in BarnesandNoble.com common stock. The company announced a five-year ORGANIZATION agreement with MBNA America Bank in January to Business Sector: Computer software and hardware develop and market a co-branded credit card; the Founded: August 1994 agreement also enables BarnesandNoble.com to market its Employees: 250 products to MBNA’s 40+ million card holders. Offline Activity In February 2000, the company launched bnRadio, an Storefronts: None Internet radio service that allows customers to listen to Catalogs Mailed: None full-length songs and excerpts from audio books. Facilities: In May 2000, the company partnered with CitySprint 1- • Santa Clara, CA headquarters 800-DELIVER to provide same-day delivery services in • San Francisco, CA IT center the New York City Borough of Manhattan at standard • Portland, OR customer service center shipping rates. The service applies to in-stock books and • Reston, VA government sales office music CDs. The two companies have been working Telecenter: In-house call center together since October 1999 on next-day delivery of Ownership: Public selected orders. Trading Symbol: BYND (NASDAQ) Major Shareholders: • William McKiernan, Chairman • Bowman Capital Management • Munder Capital Management • Franklin Advisers, Inc. • Barclays Global Investors • C.E. Unterberg Towbin • Zweig-DiMenna Partners • Vanguard Group, Inc. • DLJ Asset Management Group • California Public Employees • Dimensional Fund Advisers Financing: $360.2 million from venture capital, IPO, secondary offering, and convertible debt offering Profitable: No ($124.765 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.beyond.com Site Launch: November 1994 Site Type: Business-to-business, business-to- consumer (SOHO) Business Model: Fixed pricing Site Size: 177,000 (approx.) product SKUs, including 13,000 ESD titles Languages: English Accepts Advertising: No Site Features: General help, one-click ordering/quick buy, customer created content

24 copyright  2000 by The Intermarket Group The eCommerce Almanac

Beyond.com Home Page MANAGEMENT William S. McKiernan, Chairman Ronald Smith, Chief Executive Officer Rick Neely, Senior Vice President, Finance and Administration, and Chief Financial Officer Gordon F. Jones, Senior Vice President, Chief Information Officer John Vigouroux, Senior Vice President, Sales and Marketing Brian Mellea, Vice President, Marketing Eric Chatham, Vice President, Infrastructure Engineering Monty Mars, Vice President, Business and Corporate Development

INTERNET INFRASTRUCTURE Design Consultants: Infosys Technologies Ltd. Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications, InterNAP Network Services, Digital Island Internet Connectivity: 200 Mbps Mirror Locations: None Hardware Platform: Sun Microsystems Operating System: Solaris UNIX, Windows NT 4 Web Server Software: Apache Commerce Platform: Proprietary applications, mySAP.com Web Servers: 30 Sun Ultra 2200 and 2300 servers Database Platform: Sybase Database Servers: Three Sun Enterprise 4500 Personalization: Proprietary applications Affiliate Management: Proprietary application Payment Processing: CyberSource Payment Services Other Applications: CyberSource Digital Delivery Service, CyberSource Internet Fraud Screen, Novadigm Radia E-wrap, RedCart Universal Shopping Cart, CyberCash InstaBuy, pcOrder.com ContentSource

OPERATING BENCHMARKS Total Revenue Back-end Integration: Access to customer account 1999...... $117.28mn information, order processing, payment processing, and 1998...... $ 36.65mn order status are integrated into website. 1997...... $ 16.81mn 1996...... $ 5.86mn MARKETING Media: Offline media not used Marketing Expenditures Partnerships: 1999...... $81.35mn • Excite@Home (www.home.com) 1998...... $27.21mn • Time Warner Road Runner (www.rr.com) 1997...... $ 1.70mn • Inktomi Corp. (Inktomi Shopping Engine) 1996...... $ 0.70mn • AppCity Corp. (AppCity Shoplayer) Affiliates Program: Beyond.com Affiliate Program Development Expenditures No. of Affiliates: 88,000 1999...... $10.39mn Commission Rate: 5% for physical products 10% 1998...... $ 4.14mn for ESD products 1997...... $ 1.06mn 1996...... $ 0.43mn

Total Customers 1999...... 2,000,000 Biztravel.com, Inc. 1998...... 634,000 2401 Walnut Street 1997...... 171,270 Philadelphia, PA, U.S.A. Tel. 215-977-4000 COMMENTS Beyond.com is an online retailer of computer software, Unique Visitors (March 2000): 74,000 games, hardware, and accessories. The company generates Reach: 0.1% revenue through three online channels: its eStore Group, Rank: 9,529 government sales, and its own online storefront at www.beyond.com. The eStore Group enables companies to outsource their ORGANIZATION online software storefronts and choose from a menu of Business Sector: Travel services services which include in part, website design, transaction Founded: November 1995 processing, physical and electronic order fulfillment, and Offline Activity customer support. Representative eStore customers Storefronts: None include Compaq Computer, Hewlett Packard, Catalogs Mailed: None McAfee.com, Microsoft, Palm Computing, and Symantec. Facilities: • The eStore model allows customers to pay Beyond.com as Philadelphia, PA headquarters either a traditional reseller or for service and transaction • Linton, ND customer service office fees. • New York, NY office A Government Systems Group operates under contracts Telecenter: In-house call center with government agencies, such as the Patent and Ownership: Private Trademark Office and the Department of Defense, Trading Symbol: None enabling individuals to easily complete purchases with a Major Shareholders: negotiated pricing discount and centralized accounting and • British Airways reporting. • Continental Airlines The company reported $31.34 million in revenue for • Marriott International the quarter ending March 31, 2000 and a loss of $45.78 • Sun Microsystems million. The company’s website contributed 38% of gross • Excite@Home revenue, government sales accounted for 33% and the • Accel Partners eStores accounted for 29%. During the same quarter, a • Comcast $13.7 million restructuring charge was recorded due to a • Hummer Winblad Venture Partners strategic shift from consumer to business customers. The • New Enterprise Associates company reduced its workforce by approximately 20%, Financing: Not reported consolidated facilities, and terminated marketing Profitable: No partnerships with America Online, CNET, Excite, Yahoo! and ZDNet. WEBSITE OVERVIEW Recent acquisitions include the purchase of online Website: www.biztravel.com software retailer BuyDirect.com in March 1999 for $120.5 Site Launch: December 1996 million in Beyond.com common stock (4.9 million shares). Site Type: Business-to-consumer; Business-to-business In October 1999, the company also acquired the French Business Model: Fixed pricing online software retailer SoftGallery SARL for $500,000 I Site Size: 12 airline travel frequency programs supported cash and 48,000 shares of Beyond.com common stock. In Languages: English April 2000, the Company partially unwound the Accepts Advertising: Yes transaction, returning an 80% interest in SoftGallery to the Site Demographics: 70% male/30% female, 80% previous stockholders and issuing them an additional graduated college and 40% completed graduate degree, 177,000 shares of Beyond.com common stock plus $100,000 average household income $125,000 in cash. Site Features: General help, contextual help, one-click ordering/quick buy, online real-time customer service, customer created content; IP telephony, real-time customer-to-customer chat, foreign language product information and order pages are planned

26 copyright  2000 by The Intermarket Group The eCommerce Almanac

Biztravel.com Home Page INTERNET INFRASTRUCTURE Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications Internet Connectivity: Three T-1 lines Mirror Locations: None Hardware Platform: Sun Microsystems, Dell Operating System: Windows NT (web servers); Solaris (database servers) Web Server Software: Microsoft IIS 4.0 Commerce Platform: Proprietary application Web Servers: Multiple Dell servers Database Platform: Oracle Database Servers: One Personalization: Not used Affiliate Management: Not used

Back-end Integration: Access to customer account information, order history, inventory availability, order processing, payment processing, and order status are integrated into website.

MARKETING Media: Direct mail; radio and television advertising, newspaper advertising, consumer and business periodical advertising are planned. Partnerships: • AT&T Wireless Services (www.att.com) • Cable News Network, Inc. (www.cnnfn.com) • Citigroup, N.A. (www.bizzed.com) • Counsel Connect (www.counsel.com) • Epinions.com (www.epinions.com) • EventSource (www.eventsource.com) • Sales.com (www.sales.com) • Salesforce.com (www.salesforce.com) • Weather Channel (www.weather.com) • Work.com (www.work.com) • Global Network Architects (proprietary virtual communities) • Symantec Corp. (links from Norton Mobile Essentials software) • VISA International (eSolutions) Affiliates Program: None

MANAGEMENT Hal F. Rosenbluth, Chief Executive Officer Neal Bibeau, President Don Otterbein, Chief Information Officer and Vice President, User Experience Justin Shaw, Vice President Cindy Dale, Vice President Joe McLarney, Controller

Bluefly, Inc. Bluefly Home Page 42 West 39th Street, 9th Floor New York, NY 10018, U.S.A. Tel. 212-944-8000 Fax 212-354-3400

Unique Visitors (March 2000): 661,000 Reach: 1.0% Rank: 1,097

ORGANIZATION Business Sector: Apparel, home accessories Founded: 1991 (as Pivot Corp.) Employees: 75 full-time, 7 part-time Offline Activity Storefronts: None Catalogs Mailed: None Facilities: New York, NY headquarters Telecenter: In-house call center Ownership: Public Trading Symbol: BFLY (NASDAQ) Major Shareholders: • Kenneth Seiff, CEO • Soros Private Equity Partners • Quantum Industrial Partners Financing: $27.9 million Profitable: No ($13.19 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.bluefly.com • Site Launch: September 1998 Excite@Home (www.excite.com) Site Version 2.0 • theglobe.com inc. (www.theglobe.com) Site Type: Business-to-consumer • Inktomi Corp. (Inktomi Shopping Engine) Business Model: Fixed pricing • Lycos Inc. (www.lycos.com) Site Size: 5,000 (approx.) product SKUs from 300+ • Lycos Inc. (www.tripod.com) brands • Microsoft Corp. (www.msn.com) Languages: English • Netcentives Inc. (www.clickrewards.com) Accepts Advertising: No • WingspanBank (www.wingspan.com) Site Features: General help, one-click ordering/quick buy • Women.com Networks (www.women.com) (2-clicks) • Yahoo! Inc. (www.yahoo.com) Back-end Integration: Access to customer account Affiliates Program: None information, order history, inventory availability, order processing, payment processing, order status, and shipment MANAGEMENT tracking are integrated into website. Kenneth Seiff, Chief Executive Officer Patrick Barry, Executive Vice President and Chief MARKETING Financial Officer Media: Radio advertising, consumer periodical advertising Robert Stevens, Executive Vice President Partnerships: Marty Keane, Vice President of Product Development • America Online (Proprietary dial-up service) Andy Hilford, Vice President of Creative Services • America Online (www.aol.com) • America Online (www.compuserve.com) INTERNET INFRASTRUCTURE • America Online (www.netscape.com) Design Consultants: Evolution Online Systems, Kaufman • Alloy Online Inc. (www.alloy.com) Patricof Enterprises • e-Commerce Solutions (www.brandsforless.com) Site Maintenance: In-house staff

28 copyright  2000 by The Intermarket Group The eCommerce Almanac

Hosting Arrangement: Managed hosting The company has outsourced order fulfillment to Niles, Access Provider: Digex Inc., Akamai Technologies Illinois-based Merchandise-Out-Of-The-Box, Inc. Mirror Locations: None In June 1999, the company launched a house and home Hardware Platform: Intel Pentium division, adding more than 600 home accessories to its Operating System: Windows NT 4 online storefront. In July 1999, a complete redesign of the Web Server Software: Microsoft IIS 4.0 Bluefly.com site was launched and a new teens department Commerce Platform: Microsoft Site Server Commerce and a gifts department were introduced. In December Edition 1999 and January 2000, the company announced alliances Database Platform: Microsoft SQL Server 7 with Harpers' Bazaar, Esquire, Marie Claire, Metropolitan Personalization: Net Perceptions Group Lens Home and Seventeen which provide exclusive content on Recommendation Engine fashion trends for the Bluefly.com website. Affiliate Management: Not used During the first quarter of 2000, the company Payment Processing: CyberSource Payment Service negotiated a commitment from affiliates of Soros Private Other Applications: CyberSource Internet Fraud Screen, Equity Partners -- a previous investor -- to provide up to Net Perceptions for Marketing Campaigns, Microsoft $15 million in additional financing which can be draw Passport from during the year. In March, $3 million was drawn in the form of debt financing. The debt will be converted OPERATING BENCHMARKS into equity securities -- and considered part of the $15 Total Revenue1 million commitment -- when the next round of financing is 1999...... $4.95mn drawn. 1998...... $0.22mn 1997...... 0

Advertising Expenditures 1999...... $6.54mn 1998...... $0.44mn 1997...... n/a

Active Customers (end of period) 1999...... 54,881 1998...... 3,878 1997...... 0

Registered Users (end of period) 1999...... 336,000 1998...... 26,048 1997...... 0

1. Company reported $10.3 million in revenue with a $400,000 loss, all from discontinued operations, for FY ‘97

COMMENTS Bluefly is an online discount retailer of designer apparel and home accessories. The company was originally founded in 1991 as Pivot Corp., a marketer of golf sportswear. In June 1998, the company discontinued its golfwear business to focus on developing Bluefly.com. The company name was changed to Bluefly, Inc. in October 1998, one month after the launch of the Bluefly.com site. In the first quarter ending March 31, 2000, the company reported $3.56 million in revenue with a loss of $5.87 million. Total active customers reached 87,500 at the end of the quarter and repeat customers accounted for 42% of sales during the period. The average repeat customer placed three orders during the quarter, according to the company.

Bolt, Inc. Bolt Store Home Page 304 Hudson Street, 7th Floor New York, NY 10013, U.S.A. Tel. 212-620-5900 Fax 212-620-4315

Unique Visitors (March 2000): 1,157,000 Reach: 1.7% Rank: 493

ORGANIZATION Business Sector: General merchandise Founded: 1996 Employees: 170 (2/29/00) Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • New York, NY headquarters Partnerships: • Chicago, IL office • America Online (proprietary dial-up service) • Los Angeles, CA office • America Online (www.aol.com) Telecenter: Outsourced to PeopleSupport • America Online (www.netscape.com) Ownership: Private (IPO pending) • America Online (www.compuserve.com) Trading Symbol: BOLT (NASDAQ) • Major Shareholders: America Online (www.MovieFone.com) • • Bechtel Enterprises Holdings, Inc (21.1%) America Online (www.spinner.com) • • Daniel A. Pelson, CEO (17.7%) Emusic.com, Inc. (www.emusic.com) • • Highland Capital Partners (14.1%) HearMe (www.hearme.com) • • Sandler Capital Management (13.3%) Lycos Inc. (www.lycos.com) • • Oak Associates (7.8%) Lycos Inc. (www.tripod.com) • • Moore Capital Management, Inc. (7.5%) Lycos Inc. (www.angelfire.com) • Financing: $56.8 million Microsoft Corp. (www.msn.com) • Profitable: No ($12.917 loss for FY ’99) Microsoft Corp. (www.hotmail.com) • theglobe.com, inc. (www.theglobe.com) WEBSITE OVERVIEW • ThirdAge Media Inc. (www.thirdage.com) Website: www.bolt.com • Yahoo! Inc. (www.yahoo.com) Site Launch: August 1996 (Bolt Store: September 1999) Affiliates Program: Planned Site Type: Business-to-consumer Business Model: Fixed pricing MANAGEMENT Site Size: 450 (approx.) products Dan Pelson, Chief Executive Officer -- Previously Languages: English founded Word, an online magazine acquired by Icon CMT Accepts Advertising: Yes Corp., and as a marketing, sales, and product development Site Features: General help, contextual help, online real- executive for Sun Microsystems. B.A. in political science time customer service, threaded discussions, real-time and economics from Colgate University and M.B.A. from customer-to-customer chat, customer created content New York University. Back-end Integration: Access to customer account Mark Stutzman, Chief Technology Officer -- Previously information, order history, order processing, payment served as executive director-technology at Cyberian processing, order status, and shipment tracking are Outpost and in various positions at IBM Corp., including integrated into website. management of all technical facets of ShopIBM and as a technical team leader for IBM Global Service's web MARKETING hosting department. B.A. in English from S.U.N.Y. Media: Television and radio advertising, newspapers Jane Mount, Executive Vice President Product advertising, business periodical advertising Development/Empowerment -- Previously served as

30 copyright  2000 by The Intermarket Group The eCommerce Almanac design director of Word magazine. B.A. from Davidson COMMENTS College. Bolt.com is a leading teen content and community site. Justin Nesci, Vice President, Business During 1999, the company added an online storefront Development/Strategic Alliances -- Previously served as offering merchandise name brand apparel, music an advertising director for E! Online, managed brand accessories, and electronics. marketing and media sales for 2d Interactive, Inc., as a Specific products are selected for the Bolt.com store management consultant at Lochridge & Company, and as based on regular surveys and polls of its 1.9+ million an industry analyst for Dataquest. B.A. in Organizational members. The storefront also includes a real-time Behavior & Management and Political Science from interactive feature that indicates which products are being Brown University. purchased at any given moment in time. E-commerce revenues are generated both directly INTERNET INFRASTRUCTURE through product sales as well as from fees for store-in- Design Consultants: None store placements -- slotting fees -- paid by vendors their Site Maintenance: In-house staff own branded stores within the Bolt Store. Hosting Arrangement: Co-located server(s), hosting service Access Provider: Exodus Communications, Akamai Technologies Mirror Locations: None Hardware Platform: Intel Pentium Operating System: Windows NT, Solaris Web Server Software: Microsoft IIS 4.0 Commerce Platform: Interworld Commerce Exchange Web Servers: Multiple servers Database Platform: SQL Server 6.5 and 7, Redbrick Database Servers: Multiple servers Personalization: Interworld Commerce Exchange Affiliate Management: Not used Payment Processing: Cybersource

OPERATING BENCHMARKS Total Revenue 1999...... $4.4mn 1998...... $2.7mn 1997...... $0.5mn

Marketing Expenditures 1999...... $9.08mn 1998...... $0.63mn 1997...... $0.29mn

Technology and Production Expenditures 1999...... $3.52mn 1998...... $1.14mn 1997...... $0.81mn

Registered Users (end of period) 1999...... 1,700,000 1998...... 340,000 1997...... 0

Website Traffic (avg. pageviews per day) 1999...... 6.3mn (Dec.) 1998...... 0.9mn (Dec.) 1997...... 0

BUY.COM, Inc. Buy.com Home Page 85 Enterprise Aliso Viejo, CA 92656, U.S.A. Tel. 949-389-2000 Fax 949-389-2800

Unique Visitors (March 2000): 2,281,000 Reach: 3.4% Rank: 203

ORGANIZATION Business Sector: Computer hardware/software; consumer electronics; books/CDs/Videos; sporting goods (golf products) Founded: June 1997 Employees: 255 (3/00) Offline Activity Storefronts: None Catalogs Mailed: None Facilities: Aliso Viejo, CA headquarters Telecenter: Outsourced to ClientLogic; 350+ customer representatives in Albuquerque, NM and Buffalo, NY. Limited in-house staff to support complex customer support inquiries. Ownership: Public Trading Symbol: BUYX (NASDAQ) Major Shareholders • Scott Blum, Founder (48%) • SOFTBANK (30%) MARKETING • Ingram Capital, Inc. (4%) Media: Television and radio advertising, newspaper Total Financing: $178 million advertising, consumer periodical advertising, and direct Profitable: No ($130.17 million loss for FY ’99) mail. Partnerships: • WEBSITE OVERVIEW C-NET Inc. (www.computers.com) Website: www.buy.com, www.buycomp.com, • Inktomi Corp. (Inktomi Shopping Engine) www.buysoft.com, www.buymusic.com, Affiliates Program: Buy.com Affiliate Connection www.buyclearance.com, and approximately 1,200 other Number of Affiliates: n/a domain names Commission Rate: 2.5-8.0% based on product Site Launch: November 1997 category Site Type: Business-to-consumer; Business-to-business Business Model: Fixed pricing MANAGEMENT Site Size: 850,000 SKUs in nine product categories Gregory J. Hawkins, Chief Executive Officer -- Languages: English Previously served as a senior vice president at Ingram Accepts Advertising: Yes Micro, Inc. B.S. in business administration from Oregon Site Demographics: 72.5% male/27.5% female; 57.9% State University. college educated; 65.5% married; average age 39.5 years; Mitch C. Hill, Chief Financial Officer -- Previously $79.8K average household income served as chief financial officer and senior vice president Site Features: General help, one-click ordering/quick buy, at Walt Disney Imagineering, chief financial officer and online real time customer service vice president of Disney Development Co., director of Back-end Integration: Access to customer account finance and new business Disney Development, and as an information, order history, inventory availability, order associate at Goldman, Sachs & Co. B.S. in business processing, order status, and shipment tracking are accounting from Brigham Young University and M.B.A. integrated into website. from Harvard Business School

32 copyright  2000 by The Intermarket Group The eCommerce Almanac

Robb Brock, Vice President, Technology -- Previously Operating System: Windows NT 4.0 and Windows 2000 served as vice president of software development at Data Web Server Software: Microsoft IIS Faction, Inc. B.A. in computer science from National Commerce Platform: Microsoft Site Server Commerce University. Edition 3.0 Travis Fagan, Vice President, Customer Service -- Web Servers: 25 total IBM 4000R and Netfinity 5500 Previously served in several management positions at dual processor servers and 8500 eight-processor servers; Wells Fargo Online Financial Services, including vice also 12 domain controller servers president, manager of customer development and vice Database Platform: Microsoft SQL Server 7.0 president, manager of customer care; prior to that, served Database servers: See “Web Servers” above as a manager, customer service at U.S. West, and senior Personalization: Not used consultant at Arthur Andersen Business Consulting. B.A. Affiliate Management: LinkShare in business administration and Masters in Professional Payment Processing: CyberSource GeoPay Accounting from the University of Texas. Other Applications: RedCart Universal Shopping Cart, John C. Herr, Vice President, Advertising and Marketing Microsoft Passport -- Previously served in several management roles at Ziff Davis, Inc., including the vice president of international OPERATING BENCHMARKS and executive vice president of worldwide marketing. Total Revenue1 Prior to that, served as a brand manager in consumer 1999...... $596.9mn marketing at Johnson & Johnson and as a strategy 1998...... $125.3mn consultant at Bain & Company. B.A. in Economics from 1997...... $0.9mn Harvard University and M.B.A. from Harvard Business School. Sales to Repeat Customers Anthony A. McAlister, Vice President, Information 1999...... 49% Services -- Previously served as vice president of 1998...... n/a information services for SpeedServe.com and director of 1997...... n/a application development for Ingram Entertainment, Inc. Associate degree in data processing from Nashville State Marketing Expenditures1 Technical Institute. 1999...... $71.3mn Brent Rusick, Vice President, Sales Operations -- 1998...... $13.4mn Previously served as a U.S. channel sales manager at 1997...... $ 0.1mn Packard Bell NEC, Inc. and as a regional sales manager for Tech Data Corp. B.S. in business administration and Development Expenditures1 finance from San Diego State University. 1999...... $7.84mn Michael D. Walkey, General Manager, Small Business 1998...... $0.95mn and Vice President, Product Management -- Previously 1997...... $0.03mn served as president and CEO of BLT Electronics, Inc. and as vice president, purchasing for Ingram Micro, Inc. B.S. Total Customers (end of period) in business management from Pepperdine University. 1999...... 1.95mn Murray H. Williams, Vice President, Global Business 1998...... 0.25mn Development -- Previously served in various capacities at 1997...... n/a KPMG Peat Marwick, LLP, most recently as a Manager. B.A. in accounting and real estate from the University of 1. Figures for 1997 cover period from June 7 to December 31. Wisconsin, Madison. Thomas A. Wright, Vice President, Fulfillment COMMENTS Operations -- Previously served in several management BUY.COM is an online-only retailer of computer positions at Ingram Micro, Inc., including vice president, hardware and peripherals, software, books, videos, DVDs, logistics and sr. director North American operations. computer games, music, consumer electronics, golf-related products, and travel services. The company prices its INTERNET INFRASTRUCTURE products at a deep discount -- many are sold at cost -- and Design Consultants: None subsidizes the process through the sale of advertising on its Site Maintenance: In-house staff website. Hosting Arrangement: Co-located server(s) The company reported $207.62 million in revenue for Access Provider: Exodus Communications the first quarter ending March 31, 2000 and a loss of Internet Connectivity: One DS-3 line $32.85 million. Approximately 63% of revenue during the Mirror Locations: None quarter was generated by repeat customers and more than Hardware Platform: IBM Netfinity 449,500 new customers were acquired.

In July 1999, the company announced an agreement with United Air Lines to form BuyTravel.com which sells CarsDirect.com Inc. travel services and products on the Internet. 10567 Jefferson Blvd. In September 1999, the company announced a Culver City, CA 90232, U.S.A. partnership with Softbank America and News Corp. to Tel. 310-280-4000 expand its business into the U.K, Australia, New Zealand, and India. A similar partnership was announced with Unique Visitors (March 2000): 1,301,000 Softbank America and Vivendi to expand into continental Reach: 1.9% Europe. The company will control a 51% interest in each Rank: 491 of the international ventures. In June 2000, BUY.COM announced a partnership with the movie content site and video/DVD retailer Reel.com to ORGANIZATION takeover all aspects of that company’s online storefront Business Sector: Automobiles and back-end fulfillment. The partnership also provides Founded: October 1998 for BUY.COM to license Reel.com content for its own Employees: 702 site. Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Culver City, CA headquarters • New York, NY Potamkin headquarters • London, ON, Canada AutoData headquarters • Troy, MI AutoData corporate offices • Clifton, NJ storage facility • Westbury, NY dealer showroom • Brooklyn, NY dealer showroom • Sales offices in New York, Los Angeles, Chicago, San Francisco, Seattle, Miami, Atlanta, Denver, and Washington, DC Telecenter: In-house call center Ownership: Private (IPO pending) Trading Symbol: CRSD (NASDAQ) Major Shareholders: • idealab! (50.1%) • Foundation Capital Management (7.7%) • Primedia Ventures • MSD Capital • Goldman Sachs • Morgan Stanley Dean Witter • Oracle Corp. • Liberty Digital • East Peak Partners • Soros Private Equity Partners Financing: $488.08 million in four rounds Profitable: No ($72.33 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.carsdirect.com Site Launch: December 1998 Site Version: 2.0 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 2,600 (approx.) models of cars and trucks from 38 manufacturers Languages: English Accepts Advertising: No

34 copyright  2000 by The Intermarket Group The eCommerce Almanac

CarsDirect.com Home Page idealab! and as a principal at McKinsey & Company. B.A. in Mathematics from Dartmouth College and M.B.A. from the Stanford Graduate School of Business. Frederick Silny, Chief Financial Officer. Previously served as CFO of IHOP Corp. and in various positions at Carnation Company, including assistant general manager and division manager of its Dairies Division. B.Sc. in Psychology from McGill University, M.A. in Statistics and Psychology from the University of California at Berkeley, and M.B.A. from the University of Chicago. Gerald Popek, Chief Technical Officer. Previously served as CTO at PLATINUM Technology and at Computer Associates International. B.S. in Nuclear Engineering from New York University, and S.M. and Ph.D in Applied Mathematics from Harvard University. Site Features: General help, contextual help, online real- Greg Perrier, Senior Vice President - Data Products and time customer service Chief Executive Officer of Autodata. Previously served as Back-end Integration: Access to customer account president of Autodata prior to its acquisition by information and order processing are integrated into CarsDirect.com. H.B.A. from the Richard Ivey School of website. Business. Larry Tchamkertenian, Executive Vice President of MARKETING Sales and Operations. Previously served as vice president Media: Radio and television advertising, newspaper of operations at Quarterdeck Corp. and as director of advertising, consumer periodical advertising, direct mail operations at Knowledge Adventure. B.S. in Business Partnerships: Administration from California State University, Northridge. • American Airlines (www.aabuy2fly.com) Mark Miller, Vice President of Dealer and Industry • BizBuyer.com, Inc. (www.bizbuyer.com) • Relations. Previously served as vice president and chief Cendant Corp. (www.move.com) operating officer of Miller Automotive Group. B.S. in • Cendant Corp. (www.rent.net) Business from the University of Colorado at Boulder. • completehome.com (www. completehome.com) Ari Wasserman, Vice President of Business • Classified Ventures (www.cars.com) Development. Previously served as an associate at • Cox Interactive Media (www.cimedia.com) Sullivan & Cromwell, a law firm. B.A. in International • EarthLink Network, Inc. (www.earthlink.net) Relations from the University of Pennsylvania and J.D. • Edmunds.com, Inc. (www.edmunds.com) from Harvard Law School. • InfoSpace, Inc. (www.infospace.com) Neil Kaplan, Vice President of Strategy and Business • MarketWatch.com Inc. (www.marketwatch.com) Planning. Previously served as vice president of market • SINA.com (www.sina.com) planning and development for Universal Studios • United Airlines (www.odometermiles.com) Hollywood and as director of sales, marketing and • Inktomi Corp. (Inktomi Shopping Engine) strategic planning for The Los Angeles Times. B.S. in • Pentagon Federal Credit Union Economics from the Wharton School at the University of Affiliates Program: CarsDirect.com Affiliate Program Pennsylvania and M.M. from Kellogg Graduate School of Number of Affiliates: 11,000 Management at Northwestern University. Commission Rate: $40.00 per qualified lead INTERNET INFRASTRUCTURE MANAGEMENT Design Consultants: Full Moon Interactive, Fish Robert Brisco, Chief Executive Officer. Previously Interactive served as president of Universal Studios Hollywood Site Maintenance: In-house staff Theme Park and as senior vice president of advertising, Hosting Arrangement: Co-located server(s) marketing and new business development for The Los Access Provider: Level3 Communications, LandMark Angeles Times newspaper company. B.A. in Economics Communications and Journalism from the University of Southern California Mirror Locations: One; site is co-located on opposite and M.B.A. from the University of California at Los coasts of U.S. Angeles. Hardware Platform: Intel Pentium III Christine Bucklin, Chief Operating Officer. Previously Operating System: Microsoft Windows NT 4 and UNIX served as Entrepreneur in Residence at Internet incubator Web Server Software: Microsoft IIS 4.0

Commerce Platform: Proprietary Java and C++ from the sale of extended warranty contracts on the applications vehicles it sells, and from arranging vehicle financing. Database Platform: Microsoft SQL Server 7.0, Oracle 8i In May 1999, the company established Personalization: Not used CD1Financial.com in partnership with Bank One Corp. Affiliate Management: LinkShare (NYSE: ONE) to offer its own financing and leasing Payment Processing: Not used products. The company purchased Bank One's 49% Other Applications: Path online customer service interest in December 1999 for $2 million and terminated software, WebTrends traffic analysis software, the underlying partnership, paying Bank One an additional Chrome.com auto configuration engine $30.9 million in cash plus approximately 2.1 million shares of CarsDirect.com Class A common stock. OPERATING BENCHMARKS In July 1999, the company acquired Autodata, a Total Revenue developer of decision support tools and content for the 2000 (Q1) ...... $98.56mn automotive industry, for $6.8 million in cash and 600,000 1999...... $15.18mn shares of CarsDirect.com Class A common stock. In October 1999, acquired certain assets from Potamkin Auto Total Transaction Value Center for an estimated $14.1 million in CarsDirect.com 2000 (Q1) ...... $165.32mn Class A common stock (1.65 million shares). The 1999...... $142.71mn acquisition provided the company with relationships with approximately 200 automotive dealers in the Northeastern Sales & Marketing Expenditures U.S. 2000 (Q1) ...... $33.43mn In November 1999, the company filed a provisional 1999...... $14.57mn patent application covering its methods and technology for processing automobile purchases using an electronic Development Expenditures medium. 2000 (Q1) ...... $2.14mn In March 2000, the company announced an agreement 1999...... $2.23mn with Autoweb.com to launch a co-branded direct buying service on the Autoweb.com site as well as place links Total Customers between the two companies’ sites and to license data 2000 (Q1) ...... 12,885 content and tools to Autoweb.com. The companies also 1999...... 6,630 agreed to work together as infrastructure partners on future 1998...... 8 product development. Both companies will receive referral fees from each other based on leads resulting from COMMENTS the co-branded site and from the links. In a related CarsDirect.com operates an online vehicle shopping transaction, CarsDirect.com agreed to issue 576,701 Series service that enables customers to compare more than 2,600 D preferred shares to Autoweb.com and the company different makes, models and styles; custom configure each purchased 750,000 shares of Autoweb.com common stock with various options; order the vehicle of their choice; at $10.62 per share. apply for lease or purchase financing; and take delivery of the selected vehicle at a local dealer or in selected markets, at their home or workplace. The company’s online storefront was launched in December 1998 and the number of vehicles sold has grown from eight during 1998 to 3,789 in the fourth quarter of 1999 and 6,255 in the first quarter of 2000. California accounted for 36% of the vehicles sold during 1999 and 39% in the first quarter of 2000. The company currently works with more than 2,500 dealers in 40 states -- plus an additional 200 dealers through its subsidiary, Potamkin -- to source customers’ vehicles. The CD1Financial subsidiary currently offers loan financing in 19 states plus the District of Columbia and lease financing in 40 states and the District of Columbia. In addition to the transaction revenues from vehicle sales, CarsDirect.com also generates revenue by licensing vehicle configuration data to automotive manufacturers,

36 copyright  2000 by The Intermarket Group The eCommerce Almanac

CDnow, Inc. CDnow Home Page 1005 Virginia Drive Fort Washington, PA 19034, U.S.A. Tel. 215-619-9900 Fax 215-619-9525

Unique Visitors (March 2000): 6,654,000 Reach: 9.9% Rank: 52

ORGANIZATION Business Sector: Music/videos Founded: January 1994 Employees: 502 full-time Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Fort Washington, PA headquarters • New York, NY corporate and sales office • San Francisco, CA sales office • Los Angeles, CA allstar news office • London, U.K. corporate and sales office • Yokohama, Japan CDnow Japan office Telecenter: One in-house call center with 140 representatives Ownership: Public Trading Symbol: CDNW (NASDAQ) Major Shareholders: • Jason Olim (9%) • Matthew Olim (9%) • Grupo Sanborns/Grupo Carso (6%) • Time Warner (7%) • Sony Music Entertainment (7%) Financing: $260.3 million, including $20 million information, order history (last order only), inventory convertible debt issue availability, order processing, and order status are Profitable: No ($119.229 million loss for FY ’99) integrated into website.

WEBSITE OVERVIEW MARKETING Website: www.cdnow.com Media: Television advertising; also television advertising, Site Launch: August 1994 radio advertising, and consumer periodical advertising in Site Type: Business-to-consumer joint promotions with marketing partners Business Model: Fixed pricing Partnerships: Site Size: 500,000 (approx.) product SKUs for music • America Online (Proprietary dial-up service) CDs, tapes, records, movie videos and DVDs, and related • America Online (www.aol.com) products; more than 650,000 sound samples • America Online (www.netscape.com) Languages: English, Dutch, French, German, Italian, • America Online (www.compuserve.com) Japanese, Spanish, and Portuguese • CBS Cable (www.country.com) Accepts Advertising: Yes • Excite@Home (www.excite.com) Site Features: General help, one-click ordering/quick buy, • FirstUSA (www.firstusa.com) foreign language product information and order pages • giftpoint.com (www.giftpoint.com) Back-end Integration: Access to customer account • MTV Networks (on-air promotion on MTV and VH1)

• Netcentives Inc. (www.clickrewards.com) Payment Processing: Proprietary applications • Rolling Stone Publishing (www.rollingstone.com) Other Applications: Bluestone Software Total-e-Business, • Rolling Stone Network (www.rollingstone.com) Brio Technology data analysis software, RedCart • ShopperConnection (www.shopperconnection.com) Universal Shopping Cart, Kana Solution customer support • ThirdAge Media (www.thirdage.com) • Time Inc. (promotion across various online and offline OPERATING BENCHMARKS Time properties) Total Revenue • USA Today Online (www.usatoday.com) 1999...... $147.19mn 1998 ...... $ 56.40mn • Wingspan Bank.com (www.wingspan.com) 1997...... $ 17.37mn Affiliates Program: Cosmic Credit Program 1996...... $ 6.30mn No. of Affiliates: 260,000 Commission Rate: 7-15% based on monthly sales International Sales volume 1999...... 19% 1998...... 21% MANAGEMENT 1997...... 29% Jason Olim, President and Chief Executive Officer. 1996...... 40% Previously employed in the Professional Services group of Soft-Switch, Inc. BA in Computer Science from Brown Sales to Repeat Customers University. 1999...... 63% Michael Krupit, Chief Operating Officer. Previously 1998...... 56% served as director of technology and product development 1997...... 50% at Infonautics, Inc. and development manager at Verity, 1996...... n/a Inc. Matthew Olim, Technical Lead. Responsible for Marketing Expenditures development of the Company's system architecture and 1999...... $89.73mn transactions systems. BA in Astrophysics from Columbia 1998...... $44.57mn University. 1997...... $ 9.61mn Steven Bobowski, Senior Vice President of Marketing 1996...... $ 0.77mn Howard Blumenthal, Senior Vice President of Media Joel Sussman, Vice President and Chief Financial Officer Operating and Development Expenditures Robert Saltzman, Vice President of Corporate Sales and 1999...... $23.42mn Development 1998...... $ 8.00mn Steve Dong, Vice President of Operations 1997...... $ 2.54mn Chris Maccaro, Senior Director of Media Sales 1996...... $ 0.67mn Lisa Donovan, Director of Sales Strategy and Operations John Lyons, Director of Media Sponsorships Total Customers (end of period) 1999...... 3.26mn INTERNET INFRASTRUCTURE 1998...... 1.60mn Design Consultants: None 1997...... 296,000 Site Maintenance: In-house staff 1996...... 88,000 Hosting Arrangement: On-site server(s) Access Provider: SAVVIS Communications COMMENTS Internet Connectivity: One OC-48 connection CDnow is one of the web’s original music retailers, Hardware Platform: Sun Microsystems launching its online storefront in August 1994. The Operating System: Solaris UNIX company’s site catalogs more than 500,000 product SKUs; Web Server Software: Apache, Netscape Commerce content includes more than 650,000 sound samples and Server 125,000 product notes, reviews, and articles from Rolling Commerce Platform: Proprietary applications Stone, MTV/VH1, and the company’s own editorial staff. Web Servers: 30 (approx.) total Sun Enterprise 4000 The company reported $43.58 million in gross revenue servers -- including $3 million in advertising sales -- and a loss of Database Platform: Oracle 8 $37.81 million for the first quarter ending March 31, 2000. Database Servers: See “Web Servers” above During the quarter, 66% of revenue was generated by Personalization: Net Perceptions GroupLens repeat customers. Approximately 440,000 new customers Recommendation Engine were acquired in the first quarter, bringing the company’s Affiliate Management: Proprietary applications, ePod customer list up to 3.7 million individuals. Showcase

38 copyright  2000 by The Intermarket Group The eCommerce Almanac

In October 1998, the company merged with competitor N2K Inc. The merger was completed in March 1999 and CDW Computer consolidated N2K’s online music store, MusicBlvd.com, as well as a variety of music-related content into the Centers, Inc. CDnow site. 200 N. Milwaukee Avenue In July 1999, the company announced an agreement Vernon Hills, IL 60061, U.S.A. with Sony Corp. and Time Warner to combine its Tel. 847-465-6000 operations with the Columbia House music and video club; Fax 847-465-6800 Columbia House is owned equally by Sony and Time Warner. The merger was called off in March 2000 and Unique Visitors (March 2000): 447,000 Sony and Time Warner purchased $21 million of CDnow Reach: 0.7% common stock (2.4 million shares) -- as required by the Rank: 1,643 merger agreement -- and replaced a $30 million short-term loan commitment to CDnow with $30 million in long-term convertible debt. In the wake of the failed merger with ORGANIZATION Columbia House, the company engaged investment Business Sector: Computer hardware/software bankers Allen & Company to locate an alternative merger Founded: 1984 partner or strategic investor. Employees: 1,937 total (15 web staff) In December 1999, the company launched a digital Offline Activity delivery service that enables customers to purchase music Storefronts: Two online and download the secure, digital versions Catalogs Mailed: n/a immediately from the CDnow site or have them copied Facilities: • onto custom compiled CDs. The digital delivery service Vernon Hills, IL headquarters and distribution facility was initially created in partnership with amplified.com, • Buffalo Grove, IL customer sales/service facility which provided content along with secure encoding, • Chicago, IL customer sales/service facility hosting, and royalty payment services. The service Telecenter: Two in-house call centers with 800+ sales currently offers more than 50,000 downloadable music account managers tracks through partnerships with Liquid Audio, Ownership: Public CDuctive.com, and amplified.com.. Trading Symbol: CDWC (NASDAQ) In May 2000, the company launched CDNOW Radio Major Shareholders: which webcasts streaming music performed by a variety of • Michael Krasny, CEO bands. The company also launched in May, “The Shareholder Equity: $390.98 million CDNOW Interview,” broadband audio and video Profitable: Yes ($98.084 million profit for FY ’99) interviews of musical artists. WEBSITE OVERVIEW Website: www.cdw.com, www.cdwatwork.com Site Launch: April 1996 (commerce-enabled version) Site Type: Business-to-consumer, business-to-business Business Model: Fixed pricing Site Size: 50,000 products (approx.) Languages: English Accepts Advertising: No Site Features: General help, one-click ordering/quick buy Back-end Integration: Access to customer account information, order history, inventory availability, order processing, and order status are integrated into website.

MARKETING Media: Television advertising, business periodical advertising, direct mail Partnerships: • Excite@Home (www.excite.com) Affiliates Program: None

CDW Computer Centers Home Page OPERATING BENCHMARKS Total Revenue 1999...... $2.561bn 1998...... $1.733bn 1997...... $1.277bn

Online Sales 1999...... $163.4mn 1998...... $60.5mn 1997...... n/a

Marketing Expenditures 1999...... $66.59mn 1998...... $51.99mn 1997...... $44.70mn

Active Customers (end of period)1 2 1999...... 588,000 1998...... 634,000 1997...... 575,000

1. Encompasses sales from all channels 2. Customers completing one or more purchases in last 12 months MANAGEMENT Daniel B. Kass, Executive Vice President of Sales COMMENTS Jim Shanks, Chief Information Officer CDW is a leading direct marketer of computer Joe Kremer, Vice President of Marketing hardware and software. During 1999, business-to-business Dan Callen, Vice President of Business Development transactions accounted for approximately 93% of the company’s gross sales, up from 80% the previous year; out of 588,000 customers serviced during 1999, 285,000 were INTERNET INFRASTRUCTURE Design Consultants: None commercial customers. Approximately 6.4% of the $2.5 Site Maintenance: In-house staff billion in gross sales were processed through the CDW Hosting Arrangement: On-site server(s) website and the CDW@Work extranet. During In the first Access Provider: AT&T quarter of 2000, online sales increased to $72.4 million, up Internet Connectivity: One DS-3 line 155 percent over the comparable quarter in 1999 and up 35 Mirror Locations: One percent from the previous quarter. Hardware Platform: Compaq Computer The company redesigned its website during 1999 to Operating System: Windows NT 4 and Windows 2000 focus on better serving its core customers, small and Web Server Software: Microsoft IIS 4.0 and 5.0 medium-sized businesses, and launched an extranet service Commerce Platform: Microsoft Site Server Commerce dubbed CDW@work for its most active customers. The Edition CDW@work sites are integrated directly into the Web Servers: Three 500MHz quad-processor Compaq company’s ERP system, enabling customers to track order ProLiant 6400R servers status, manage current assets, order configured systems, Database Platform: Microsoft SQL Server 7.0, linked to and obtain purchase history. Approximately $10 million in back-end IBM AS/400 legacy system sales were generated through the CDW@work sites during Database Servers: Four 400MHz quad-processor Compaq 1999 and more than 26,000 of the customized sites were in ProLiant 5500R servers and one 8-way 550MHz Compaq use at the end of March 2000. The CDW@work sites also ProLiant 8000 server provide each customer with up-to-the-minute availability Personalization: Microsoft Site Server Commerce Edition information on the CDW account team assigned to service Affiliate Management: Not used their account; the real-time link to CDW’s back-end Payment Processing: Proprietary applications systems enables reporting on when account team members Other Applications: Personify Essentials, RedCart swipe their company ID cards to clock in or out, indicating Universal Shopping Cart, ServiceWare Knowledge-Pak whether they’re available to receive customer service calls. suite and Knowledge Kiosk, Microsoft Passport

40 copyright  2000 by The Intermarket Group The eCommerce Almanac

CompUSA Inc. CompUSA Home Page 14951 North Dallas Parkway Dallas, TX 75240, U.S.A. Tel. 972-982-4000 Fax 972-982-4276

Unique Visitors (March 2000): 697,000 Reach: 1.0% Rank: 1,040

ORGANIZATION Business Sector: Computer hardware/software Founded: 1984 Employees: 19,700 total Offline Activity Storefronts: 218 Catalogs Mailed: None Facilities: • Dallas, TX headquarters • Marlborough, MA website distribution facility • Dallas, TX distribution facility plus five others nationwide Telecenter: Three shared in-house call centers with 1,500 (approx.) customer service and technical support representatives Ownership: Private Trading Symbol: None Major Shareholders: Wholly-owned subsidiary of Grupo Sanborns SA de CV MANAGEMENT Shareholder Equity: $335.5 million (12/31/99) Ronald J. Gilmore, Executive Vice President, Marketing Profitable: No ($45.75 million loss for FY ’99) Paul Poyfair, Executive Vice President, New Business Development WEBSITE OVERVIEW Ed Jurica, Vice President of Information Systems Website: www.compusa.com, www.compusapc.com, John Woodson, Vice President, E-commerce www.compusaauctions.com, www.compusastores.com Michael Laskoff, Vice President of Marketing Site Launch: December 1996 Site Type: Business-to-consumer, business-to-business INTERNET INFRASTRUCTURE Business Model: Fixed pricing and auction/negotiated Design Consultants: CGN Marketing & Creative Services, pricing IBM Global Services Site Size: 180,000 (approx.) product SKUs, including Site Maintenance: In-house staff and outside consultants 130,000 (approx.) software titles Hosting Arrangement: Co-located server(s) Languages: English Access Provider: IBM Global Services Accepts Advertising: No Hardware Platform: Compaq Computer Site Features: General help, one-click ordering/quick buy Operating System: Solaris, Windows NT4 Back-end Integration: Access to customer account Web Server Software: Netscape Enterprise Server 3.6, information, order history, product availability, order Microsoft IIS 4.0 processing, and order status is integrated into website Commerce Platform: BroadVision, proprietary applications MARKETING Web Servers: Multiple ProLiant 5000 servers Media: Television and radio advertising, newspaper Database Platform: Microsoft SQL Server advertising, business periodical advertising Database Servers: Multiple ProLiant 5000 servers; links to Partnerships: None back-end SAP Retail ERP system Affiliates Program: None Personalization: BroadVision Affiliate Management: Not used

Payment Processing: Back-end POS payment processing The company has signed-on to the RosettaNet e- application business initiative and has implemented the business Other Applications: Fairmarket AuctionPlace software, process standards with three of its major trading partners, pcOrder ContentSource 2.0, webMethods B2B, E.piphany Ingram Micro, 3com, and Compaq Computer. E.4

OPERATING BENCHMARKS Total Revenue1 2 1999...... $6.32bn 1998...... $5.29bn 1997...... $4.61bn

1. Fiscal year ending June 30 2. Based on revenue from all sources because company does not break out data for web activity.

COMMENTS CompUSA is one of the largest bricks-and-mortar computer retailers in the U.S. with more than 200 storefronts nationwide. Mexican-retailer Grupo Sanborns acquired a 14.8% stake in the company during 1999. In January 2000, Grupo Sanborns announced an agreement with CompUSA to tender the remaining outstanding common shares at $10.10 each and acquired the company for approximately $800 million in cash. The company’s Internet operations reported $13.5 million in revenue for the first-half of FY 2000 ending December 25, 1999, with a loss of $27.86 million; total company-wide sales for the same period were $2.731 billion with a loss of $14.946 million. The company launched its first Internet storefront in December 1996 and the online operations were spun into the CompUSA Net.com subsidiary in March 1999. In a bid to reverse mounting online losses, the website was relaunched in October 1999 under a new brand -- and domain name -- Cozone.com. Cozone.com was shut down in March 2000 and the company returned its Internet storefront to the compusa.com site. The CompUSA Internet storefront today seamlessly integrates online selling with the company’s bricks-and- mortar presence. Customers can search for a particular product and from every product page either place their order online or determine if the product is currently in- stock at one or more nearby CompUSA retail stores. In- store and online pricing also now largely coordinated and items purchased online can be returned to any CompUSA retail storefront. In June 1999, the company launched an online auction site, CompUSAauctions.com. The auction site enables customers to bid on new products returned by companies to CompUSA’s commercial sales division as well as manufacturer closeouts, discontinued merchandise, and refurbished products. In August 1999, the compUSAPC.com site was launched, enabling customers to custom configure CompUSA-brand PCs online and then have it delivered.

42 copyright  2000 by The Intermarket Group The eCommerce Almanac

Crutchfield New Media LLC Crutchfield Home Page Crutchfield Corp. 1 Crutchfield Park Charlottesville, VA 22911, U.S.A. Tel. 804-817-1000 Fax 804-817-1010

Unique Visitors (March 2000): 440,000 Reach: 0.7% Rank: 1,440

ORGANIZATION Business Sector: Consumer electronics Founded: 1974 Employees: 550 (Web staff: 12) Offline Activity Storefronts: Two Catalogs Mailed: 30 million Facilities: Charlottesville, VA headquarters and fulfillment center Telecenter: In-house facility in Norton, VA with 300 representatives Ownership: Private Trading Symbol: None Major Shareholders: Subsidiary of Crutchfield Corp. Shareholder Equity: Not reported Profitable: Yes

WEBSITE OVERVIEW Website: www.crutchfield.com Site Launch: August 1995 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 4,000 products (approx.) Languages: English INTERNET INFRASTRUCTURE Accepts Advertising: No Design Consultants: None Site Features: General help, one-click ordering/quick buy; Site Maintenance: In-house staff contextual help, online real-time customer service, Hosting Arrangement: On-site server(s) threaded discussions, real-time customer-to-customer chat, Access Provider: AT&T and customer created content are planned. Internet Connectivity: One DS-3 line Back-end Integration: Access to inventory availability, Mirror Locations: None order status, and shipment tracking are integrated into Hardware Platform: Intel Pentium website; access to customer account information, and Operating System: Windows NT customer order history are planned Web Server Software: Microsoft IIS 4.0 Commerce Platform: Proprietary application MARKETING Web Servers: Five Media: Radio advertising, newspaper advertising, Database Platform: Microsoft SQL server consumer periodical advertising, direct mail Database Servers: One Partnerships: Personalization: Not used • Autobytel.com (www.autobytel.com) Affiliate Management: Not used Affiliates Program: None Payment Processing: Proprietary application Other Applications: Microsoft Passport MANAGEMENT David Dierolf, Vice President-Information Technology

Dell Online Dell Online Home Page Dell Computer Corp. One Dell Way Round Rock, TX 78682, U.S.A. Tel. 512-338-4400

Unique Visitors (March 2000): 2,055,000 Reach: 3.1% Rank: 230

ORGANIZATION Business Sector: Computer hardware/software Founded: 1984 Employees: 36,500 Offline Activity Storefronts: None Catalogs Mailed: n/a Facilities: • Austin, TX headquarters and distribution facility • Limerick, Ireland manufacturing and distribution facility MARKETING • Penang, Malaysia manufacturing and distribution Media: Television advertising, newspaper advertising, facility consumer and business periodical advertising, and direct • Nashville, TN distribution facility mail. • Eldorado do Sur, Brazil manufacturing facility Partnerships: • Xiamen, China manufacturing and sales support facility • Amazon.com Inc. (www.amazon.com) Ownership: Public • Healtheon/WebMD (www.webmd.com) Trading Symbol: DELL (NASDAQ) • OneClick.com (www.oneclick.com) Major Shareholders: n/a • ThirdAge Media Inc. (www.thirdage.com) Shareholder Equity: $5.308 billion Affiliates Program: Dell Affiliates Program Profitable: Yes ($1.860 billion for FY ‘00) Number of Affiliates: n/a Commission Rate: approx. 1% WEBSITE OVERVIEW Website: www.dell.com, www.dellauction.com, MANAGEMENT www.gigabuys.com David Hood, Vice President-Dell Online Site Launch: July 1996 John Zoglin, Director Online technology Site Type: Business-to-business, Business-to-consumer Business Model: Fixed pricing and negotiated/auction INTERNET INFRASTRUCTURE pricing Design Consultants: None Site Size: Seven lines of Dell PCs, notebooks, servers and Site Maintenance: In-house staff workstations and 30,000 (approx.) hardware and software Hosting Arrangement: On-site server(s) products Access Provider: Sprint, UUNET/MCI Worldcom, Cable Languages: English and 22 other languages for 84 & Wireless, and three other ISPs country-specific sites Mirror Locations: None Accepts Advertising: No Hardware Platform: Intel Pentium II and Pentium III Site Features: General help, contextual help, online real- Operating System: Windows 2000 and Windows NT time customer service, threaded discussions, foreign Web Server Software: Microsoft IIS language product information and order pages; One-click Commerce Platform: Microsoft Site Server ordering/Quick buy and real-time customer-to-customer Commerce Edition chat are planned Web Servers: 300+ Dell dual processor PowerEdge Back-end Integration: Access to customer order history, Servers order status, and shipment tracking are integrated into Database Platform: Microsoft SQL Server 7.0 website. Database Servers: 40+ Dell PowerEdge Servers Personalization: Microsoft Site Server P&M

44 copyright  2000 by The Intermarket Group The eCommerce Almanac

Affiliate Management: LinkShare Payment Processing: Proprietary application drugstore.com, inc. Other Applications: NetIQ AppManager, FairMarket 13920 Southeast Eastgate Way, Suite 300 AuctionPlace, AskJeeves search, Microsoft Passport Bellevue, WA 98005, U.S.A. Tel. 425-372-3200 OPERATING BENCHMARKS Fax 425-372-3805 Total Revenue1 2000...... $25.3mn 1999...... $18.2mn Unique Visitors (March 2000): 1,591,000 1998...... $12.3mn Reach: 2.4% Rank: 329 Online Sales (avg. sales per day) 1 Q4 2000...... $40mn ORGANIZATION Q3 2000...... $35mn Business Sector: Health and beauty products Q2 2000...... $30mn Founded: April 1998 Q1 2000...... $18mn Employees: 408 (2/00) Offline Activity International Sales1 2 Storefronts: None 2000...... 29% Catalogs Mailed: None 1999...... 32% Facilities: 1998...... 31% • Bellevue, WA headquarters • Bridgeport, NJ distribution center 1. Fiscal year ending January Telecenter: In-house call centers in Bellevue, WA, Ft. 2. Covers sales from all channels; company does not break-out data for Worth, TX (at RX America), and Bridgeport, NJ online sales channel Ownership: Public Trading Symbol: DSCM (NASDAQ) COMMENTS Dell Computer is one of the world’s largest personal Major Shareholders: • computer manufacturers and a leading e-commerce Amazon.com, Inc. (23.8%) • company. Almost 50% of the company’s total revenue at Rite Aid Corp. (17.9%) the end of the most recent fiscal year were generated • Kleiner Perkins Caufield & Byers (13.5%) through its website at www.dell.com and through its • General Nutrition Investment Co. (5.7%) Premier Pages extranet. The site enables customers to • Vulcan Ventures Inc. (4.4%) order new systems, refurbished systems, and software and • Peter Neupert, CEO (3.7%) accessories. • Maveron Equity Partners (2.7%) Premier Pages are personalized websites developed by Financing: $230 million in three rounds, IPO and the company for its corporate and institutional customers. secondary offering The individual websites enable customers to order pre- Profitable: No ($115.8 million loss for FY ’99) approved product configurations and they provide access to negotiated pricing, purchase history, real-time order WEBSITE OVERVIEW tracking, and Dell account team information. More than Website: www.drugstore.com, www.mydrugstore.com, 40,000 Premier Pages had been created at the end of www.yourdrugstore.com January 2000. Approximately 70% of the company’s Site Launch: February 1999 online sales during the 2000 fiscal year were business-to- Site Version: 2.0 business and were originated on the Premier Pages Site Type: Business-to-consumer websites. Business Model: Fixed pricing The site has more than 160,000 content pages, Site Size: 17,000 (approx.) SKUs excluding pharmacy including a virtual help desk -- the Ask Dudley service -- items with natural language search capability and more than Languages: English 50,0000 pages of technical support documents. The Ask Accepts Advertising: No Dudley service receives more than 100,000 requests per Site features: General help, contextual help, one-click week. ordering, real-time online customer service, customer- In July 1999, the company launched its DellAuction created content, and alternative low-bandwidth text-only service, enabling customers to buy, sell, and trade any pages. brand of used PC in person-to-person auctions and to bid Back-end Integration: Access to customer account on returned and refurbished Dell products. information, order history, inventory availability, order status, and shipment tracking are integrated into website.

MARKETING drugstore.com Home Page Media: Television and radio advertising, newspaper advertising, consumer and business periodical advertising, and direct mail Partnerships: • America Online (proprietary dial-up service) • America Online (www.netscape.com) • Amazon.com, Inc. (www.amazon.com) • AppCity Corp. (AppCity Shoplayer) • Excite@Home (www.excite.com) • Intelihealth (www.intelihealth.com) • Medscape (www.medscape.com) • OnHealth (www.onhealth.com) • ThirdAge (www.thirdage.com) • wisecity.com (www.wisecity.com) • Women.com (www.women.com) • Yahoo! Inc. (www.yahoo.com) Affiliates Program: drugstore.com Associates Program No. of Affiliates: n/a Commission Rate: 15% plus $5.00-15.00 for each new customer referral

MANAGEMENT Peter M. Neupert, President, Chairman and Chief Executive Officer. Previously served in several positions for Microsoft Corp., including vice president of news and publishing for company's interactive media group. BA from Colorado College and MBA from the Amos Tuck Erik Morris, Director - Consumer Marketing. Previously School of Business at Dartmouth College. served as director of communications and vice president of Kal Raman, Chief Operating Officer and Senior Vice communications for RealNetworks, senior vice president President-Operations. Previously served as vice in charge of client service at McCann Erickson president-technology and as vice president-technology and Advertising Seattle, and managed advertising for the operations of drugstore.com, vice president and chief launch of Windows 95 and Internet Explorer 3.0 at information officer of Nations Rent, senior director- Microsoft. B.A. from Western Washington University. information systems of Blockbuster Inc. and director- Christopher Hauser, Vice President - Operations. international division of Wal-Mart Stores Inc Previously served as senior vice president, information Sean Nolan, Chief Technology Officer technologies and operations for Multiple Zones David E. Rostov, Vice President and Chief Financial International, director of distribution for Fingerhut Officer. Previously served as chief financial officer of Companies, Inc., and commanded the largest distribution Nextel International, Inc. and in various capacities at center in the U.S. Department of Defense. M.S. in McCaw Cellular Communications, Inc. BA from Oberlin Logistics Operations and M.B.A. from the United States College and MBA and Master's in Public Policy from the Naval Academy. University of Chicago Graduate School of Business. John Williams, Vice President of Merchandising and Janice Gaub, Vice President of Marketing Store Development Mark Silverman, Vice President - Business Development. Previously served as a lawyer with the Venture Law Group INTERNET INFRASTRUCTURE and with Heller, Ehrman, White & McAuliffe. B.A. from Design Consultants: None the University of California, Berkeley and J.D. from the Site Maintenance: In-house staff and outside consultants University of California, Los Angeles. Hosting Arrangement: Co-located server(s) Judith McGarry, Vice President - Strategic Access Provider: Exodus Communications Relationships. Previously served as a partner with Stone Mirror Locations: None Communications. B.A. from Middlebury College and Hardware Platform: Compaq Computer M.B.A. from the Amos Tuck School of Business at Operating System: Microsoft Windows NT4 Dartmouth College. Webserver Software: Microsoft IIS 4.0

46 copyright  2000 by The Intermarket Group The eCommerce Almanac

Commerce Platform: Proprietary application Key strategic partners include mail-order pharmacy Web Servers: 50+ Compaq ProLiant web and database RxAmerica, which fulfills the company’s prescription servers orders in all 50 states, and Walsh Distribution which Database Platform: Oracle 8 fulfills a substantial majority of non-pharmaceutical Database Servers: See “Web Servers” above orders. A February 1999 technology license and Personalization: Proprietary application advertising agreement with Amazon.com, Inc. (NASDAQ: Affiliate Management: Proprietary application AMZN) enables the company to leverage Amazon.com’s Payment Processing: Proprietary application proprietary e-commerce technology and its customer base Other Applications: Xchange eCRM, Personify Essentials, of 15 million individuals. In June 1999, the company also RedCart Universal Shopping Cart entered into alliances with Rite Aid Corp. (NYSE: RAD), which enables drugstore.com customers to pick-up their OPERATING BENCHMARKS prescriptions at any one of 3,800+ Rite Aid stores, and Total Revenue with General Nutrition Companies, Inc. which designates 1999...... $34.8mn it as the exclusive online provider of GNC-branded 1998...... 0 vitamins, nutritional supplements, and related products. In April 2000, direct access to the company’s online Sales to Repeat Customers storefront was added to the Amazon.com site through a 1999 (Q4) ...... 44% “Health & Beauty” tab placed among the navigation tabs 1999 (Q3) ...... 33% which are displayed at the top of every page in the 1999...... 0% Amazon.com site. The Beauty.com site was acquired by drugstore.com on Marketing Expenditures February 2, 2000 for $40.4 million in stock. 1999...... $61.5mn The company reported total revenue of $22.74 million 1998...... $ 3.1mn for the first quarter ending April 2, 2000 with a loss of $49.48 million. Repeat customers accounted for 50% of Technology and Content Expenditures orders during the quarter, up from 44% in the previous 1999...... $14.9mn quarter. Total customers increased by more than 295,000, 1998...... $ 2.2mn ending the quarter at slightly more than 1 million.

Total Customers 1999 (Q4) ...... 695,000 1999 (Q3) ...... 267,000 1999 (Q2) ...... 168,000

COMMENTS drugstore.com was founded in April 1998 and launched its online storefront in February 1999. An Initial Public Offering (IPO) of the company’s stock was completed in July 1999 with the sale of five million common shares at $18.00 each. An additional $138 million was raised through a secondary offering and a private placement with Amazon.com in March 2000. The company sells health and beauty products and prescription drugs to consumers online. It divides its market into five principal segments: health, beauty, wellness, personal care, and pharmacy. On-site services include an implementation of Amazon.com’s 1-Click order feature, e-mail reminders for prescription refills and other frequently purchased items, a Resource Center which includes detailed “buying guides” and interactive “shopping advisors” to assist in locating products, and e- mail based “Ask Your Pharmacist” and “Beauty Expert” services which provide individualized answers to customer questions within one business day. Prescription customers are also able to securely access their individual medication profiles and prescription histories through the site.

eBay Inc. eBay Home Page 2125 Hamilton Avenue San Jose, CA 95125, U.S.A. Tel. 408-558-7400 Fax 408-558-7401

Unique Visitors (March 2000): 14,032,000 Reach: 20.8% Rank: 16

ORGANIZATION Business Sector: General merchandise Founded: September 1995 Employees: 300+ Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • San Jose, CA headquarters • Corporate offices of international subsidiaries located in Australia, England, Germany, Japan and Switzerland Telecenter: In-house customer support center in Salt Lake City, Utah Ownership: Public Trading Symbol: EBAY (NASDAQ) Major Shareholders: • Pierre Omidyar, Chairman • Meg Whitman, President and CEO • Jeffrey Skoll, Vice President Financing: $823.9 million in one round, IPO and secondary offering Profitable: Yes ($10.828 million profit for FY ’99)

WEBSITE OVERVIEW Website: www.ebay.com Site Launch: September 1995 • America Online (ICQ) Site Type: Consumer-to-consumer; business-to-business • Business Model: Auction pricing America Online (www.aol.com) • Site Size: 4.5+ million items listed in more than 4,000 America Online (www.digitalcities.com) • product categories America Online (www.netscape.com) Languages: English, German, Japanese, Chinese • America Online (www.compuserve.com) Accepts Advertising: No • Autotrader.com (www.autotrader.com) Site Features: General help, customer created content, • Buena Vista Internet (www.go.com) threaded discussion groups, customer-to-customer chat, • Earthlink Inc. (www.wizshop.com) foreign information and order pages • Go.com (www.go.com) Back-end Integration: Access to customer account • OracleMobile (www.oraclemobile.com) information and order processing are integrated into Affiliates Program: None website. MANAGEMENT MARKETING Pierre Omidyar, Chairman. Co-founded Ink Media: Radio advertising, consumer periodical advertising Development Corp. which was subsequently renamed Partnerships: eShop and ultimately purchased by Microsoft Corp. Also • America Online (Proprietary dial-up service) served in Developer Relations at General Magic and as a

48 copyright  2000 by The Intermarket Group The eCommerce Almanac developer for Claris, a subsidiary of Apple Computer. Gross Merchandise Sales B.S. in Computer Science from Tufts University. 1999...... $2.81bn Meg Whitman, President and Chief Executive Officer. 1998...... $745mn Previously served as general manager of Hasbro Inc.'s 1997...... $ 95mn Preschool Division, president and CEO of Florists 1996...... $ 7mn Transworld Delivery (FTD), in various positions for Stride Rite Corp., including president of the Stride Rite Division, Marketing Expenditures executive vice president for the Keds Division and 1999...... $95.96mn corporate vice president of strategic planning, senior vice 1998...... $35.98mn president of marketing for the Disney Consumer Products 1997...... $15.62mn Division of Walt Disney Company, vice president of 1996...... $13.14mn management consultants Bain & Company. B.A. in Economics from Princeton University and M.B.A. from Development Expenditures the Harvard Business School. 1999...... $23.79mn Gary Bengier, Chief Financial Officer 1998...... $ 4.64mn Brian Swette, Chief Operating Officer 1997...... $ 0.83mn Maynard Webb, President, eBay Technologies 1996...... $ 0.03mn Michael Wilson, Senior Vice President, Engineering Steve Westly, Senior Vice President, International and Registered Users (end of period) General Manager of eBay Premium Services 1999...... 10.01mn Jeffrey Skoll, Vice President-Strategic Planning and 1998...... 2.18mn Analysis 1997...... 0.34mn Jeff Jordan, Vice President and General Manager of 1996...... 0.04mn Regionals and Services COMMENTS INTERNET INFRASTRUCTURE eBay was founded in September 1995 by Pierre Design Consultants: None Omidyar. In June 1997, Benchmark Capital invested $3 Site Maintenance: In-house staff million in the company’s first round financing. The Hosting Arrangement: Co-located server(s) company sold 3.5 million shares at $18.00 each in a Access Provider: Exodus Communications, AboveNet September 1998 IPO and sold another 13.8 million shares Communications in a December 1999 secondary offering. Internet Connectivity: Eight DS-3 lines eBay operates a series of online trading communities Mirror Locations: None for individuals. The company’s service enables sellers to Hardware Platform: Sun Microsystems, Intel Pentium list items for sale, buyers to bid on items of interest, and all Operating System: Solaris and Windows NT eBay users to browse through listed items. The web-based Web Server Software: Microsoft IIS 4.0 service is fully automated and topically arranged into 14 Commerce Platform: Proprietary applications top-level categories -- such as Computers, Dolls & Doll Web Servers: Multiple Sun Starfire servers Houses, Coins & Stamps, and Automotive -- and more Database Platform: Oracle than 4,000 sub-categories. The company operates it’s Database Servers: Multiple Sun Starfire servers flagship national trading community as well as 53 regional Personalization: Proprietary application sites for 50 leading metro areas and international sites for Affiliate Management: Not used Canada, Japan -- in partnership with NEC -- the UK, Payment Processing: Proprietary application Germany, and Australia. In March 2000, the company Other Applications: Kana Solution customer support launched an eBay Business Exchange for the small business-to-business market segment. OPERATING BENCHMARKS All items sold through eBay are priced through an Total Revenue auction format, creating a “person-to-person” trading 1999...... $224.7mn environment. The number of items listed for sale has 1998...... $ 86.1mn increased from 289,000 in 1996 to more than 129 million 1997...... $ 41.4mn items at the end of 1999. The average auction closing price 1996...... $ 32.1mn during 1999 was $47.00. Total revenue for the first quarter ending March 31, 2000 was $85.8 million with a profit of $6.3 million. Gross

copyright  2000 by The Intermarket Group 49 The eCommerce Almanac merchandise sales for the quarter totaled $1.15 billion from 53.6 million hosted auctions. The company also added Eddie Bauer, Inc. more than 2.6 million new registered users during the 15010 N.E. 36th Street quarter, bringing the total number to 12.6 million at the Redmond, WA 91521, U.S.A. end of March. Tel. 425-882-6100 The company acquired auctioneers Butterfield & Butterfield in May 1999 for 1.3 million shares of eBay Unique Visitors (March 2000): 600,000 common stock. The acquisition serves as the core of Reach: 0.9% eBay’s “Offline Segment.” Other recent acquisitions Rank: 1,202 include the May 1999 purchase of Kruse International, an appraiser and auctioneer of classic cars, for 787,312 shares of eBay common stock; and alando, Germany's leading ORGANIZATION online personal trading community, for 316,000 shares of Business Sector: Apparel, home products eBay common stock. Founded: 1920 The company acquired Billpoint Inc., which offers a Employees: 7,400 (approx.) total staff turnkey credit card authorization, billing, and payment Offline Activity processing solution for Internet merchants, in May 1999 Storefronts: 532 in U.S. and Canada for 524,132 shares of eBay common stock. A related Catalogs Mailed: 97 million agreement was inked with Wells Fargo Bank in March Facilities: • 2000 which enables eBay sellers to accept payment by Redmond, WA headquarters credit card using Wells Fargo’s merchant services. As part • Groveport, OH distribution center of the deal, Wells Fargo agreed to purchase a minority • Columbus, OH distribution center equity interest in Billpoint. Wells Fargo also entered into a • Toronto, ONT, Canada distribution center long-term payment processing and customer care contract Telecenter: Four in-house call centers; one call center with at the same time with Billpoint. 600 (approx.) representatives dedicated to website Ownership: Private Trading Symbol: None Major Shareholders: • Spiegel Inc. (100%) Shareholder Equity: $725 million (Spiegel Inc.) Profitable: Yes

WEBSITE OVERVIEW Website:www.eddiebauer.com Site Launch: August 1996 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 1,200+ products plus ability to order any hardcopy catalog item by product number Languages: English, Japanese Accepts Advertising: No Site Features: General help, contextual help, online real- time customer service, foreign language product information and order pages (Japanese site only) Back-end Integration: Access to inventory availability, order processing, and payment processing are integrated into website; web access to customer account information, order history, order status, and shipment tracking are planned.

MARKETING Media: Radio and television advertising, newspaper advertising, consumer and business periodical advertising, direct mail

50 copyright  2000 by The Intermarket Group The eCommerce Almanac

Eddie Bauer Home Page Access Provider: UUNET/MCI Worldcom, ANS Communications Mirror Locations: One Hardware Platform: Intel Pentium Pro Operating System: Microsoft Windows NT 4 Web Server Software: Microsoft IIS 4.0 Commerce Platform: Microsoft Site Server Commerce Edition 3.0 Database Platform: Microsoft SQL Server 6.5/7.0 Personalization: Microsoft Site Server Commerce Edition 3.0, proprietary applications Affiliate Management: Dynamic Trade ConnectCommerce, proprietary application Payment Processing: Proprietary back-end legacy application Other Applications: iDREAM Software Jio, Cisco Local Director, ServiceSoft Technologies online customer service software, CyberCash InstaBuy; Tools: Macromedia DreamWeaver and Fireworks, Photoshop, Quark Express, Microsoft Visual Interdev and Source Save, and custom tools for maintenance & content management

OPERATING BENCHMARKS Total Revenue1 2 2000...... $1.79bn 1999...... $1.71bn Partnerships: 1998...... $1.75bn • America Online (Proprietary dial-up service) 1997...... $1.57bn • America Online (www.aol.com) • America Online (www.netscape.com) Active Customers (end of period)1 2 • America Online (www.compuserve.com) 2000...... 3.4mn • GiftCertificates.com (www.giftcertificates.com) 1999...... 3.4mn • Microsoft Corp. (www.msn.com) 1998...... 3.4mn • Microsoft Corp. (www.sidewalk.com) 1997...... 3.2mn • MyPoints.com Inc. (www.mypoints.com) • Yahoo! Inc. (www.yahoo.com) 1. Fiscal year ending January 2 • 2. Based on sales from all sources because company does not breakout National Geographic Ventures (multi-media data for web activity partnership) • Cahoots Inc. (www.cahoots.com) COMMENTS Affiliates Program: Dynamic Trade Partner Program Eddie Bauer is a leading specialty retailer of branded Number of Affiliates: n/a and private label apparel, accessories and home Commission Rate: Variable furnishings. The company markets its products through more than 500 stores in the U.S. and Canada, direct mail MANAGEMENT catalogs, and websites for its individual and business Mark Staudinger, Divisional Vice President-Interactive customers. Media Approximately 74% of the company’s total sales are Sally McKenzie, Director-Interactive Media generated through its retail and outlet stores; the balance is Merchandising and Operations generated through its websites and direct mail catalogs. Luke Friang, Director-Interactive Media Development Goldman Sachs estimates that the company generated Jodi Watson, Senior Manager of Interactive Media approximately $20-$25 million from its online storefront Marketing during 1999. Apparel accounts for approximately 86% of the company’s total sales. INTERNET INFRASTRUCTURE The company’s marketing strategy is based on Design Consultants: Fry Multimedia Inc. leveraging its multiple distribution channels through cross- Site Maintenance: In-house staff and outside consultants promotion such as referring retail customers to catalog Hosting Arrangement: Co-located server(s) stations within stores for additional merchandise and size

copyright  2000 by The Intermarket Group 51 The eCommerce Almanac options; utilizing its catalog customer database to identify potential store locations; and using catalog space and Egghead.com, Inc. register receipts to advertise its e-commerce site. 1350 Willow Road Menlo Park, CA 94025, U.S.A. Tel. 650-470-2400 Fax 650-324-3190

Unique Visitors (March 2000): 2,307,000 Reach: 3.4% Rank: 233

ORGANIZATION Business Sector: Computer hardware & software, Consumer electronics, General merchandise Founded: 1984 Employees: 630 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Menlo Park, CA headquarters • Vancouver, WA corporate offices • Vancouver, WA distribution facility Telecenter: In-house call center Ownership: Public Trading Symbol: EGGS (NASDAQ) Shareholder Equity: $68.9 million Profitable: No ($154.929 million loss for FY ’99) Profitability anticipated 2002

WEBSITE OVERVIEW Website: www.egghead.com, www.onsale.com, www.surplusdirect.com, www.surplusauction.com Site Launch: February 1996; Surplus Direct - May 1997; Onsale - May 1995 Site Type: Business-to-business; Business-to-consumer Business Model: Fixed pricing (superstores) and Auction/Negotiated pricing Site Size: 40,000+ products (approx.) Languages: English Accepts Advertising: No Site Features: General help, one-click/quick buy (ONSALE Auctions & Deals) Back-end Integration: Access to customer account information, inventory availability, order processing, payment processing, order status, and shipment tracking integrated into website.

MARKETING Media: Radio and television advertising, business periodical advertising Partnerships: • America Online Inc. (proprietary online service) • America Online Inc. (www.aol.com) • America Online Inc. (www.compuserve.com)

52 copyright  2000 by The Intermarket Group The eCommerce Almanac

• America Online Inc. (www.netscape.com) Egghead.com Home Page • All Business (www.allbusiness.com) • CNET Inc.(www.cnet.com) • Excite@Home (www.excite.com) • Deja News, Inc. (www.deja.com) • Everypath Inc. (www.everypath.com) • Lycos Inc. (www.lycos.com) • Microsoft Inc. (www.msn.com) • MySimon (www.mysimon.com) • Quicken.com (www.quicken.com) • USA.net (www.usanet.net) • Wired Digital, Inc. (www.hotbot.com) • Yahoo!, Inc. (www.yahoo.com) • Yahoo!, Inc. (netscape.yahoo.com) • Ziff-Davis ComputerShopper (www.ComputerShopper.com) • Ziff-Davis (www.zdnet.com) • Inktomi Corp. (Inktomi Shopping Engine) Affiliates Program: None

MANAGEMENT S. Jerrold Kaplan, Chief Executive Officer. Previously served as chairman and CEO of GO Corp., a developer of pen-based computers. B.A. in History and Philosophy of Science from the University of Chicago and M.S.E. and Ph.D. in Computer and Information Science from the University of Pennsylvania. Jeffrey F. Sheahan, President and Chief Operating Officer. Previously served as COO of Onsale, Inc and INTERNET INFRASTRUCTURE President of Microwarehouse Europe. B.S. in Political Design Consultants: None Science and Economics from University of Massachusetts. Site Maintenance: In-house staff John E. Labett, Senior Vice President and Chief Financial Hosting Arrangement: On-site server(s) Officer. Previously served as executive vice president and Access Provider: Epoch Internet, Exodus Communications CFO of House of Fabrics Inc.; vice president and CFO of Internet Connectivity: Two DS-3 lines The Pet Food Giant Inc. start-up; and executive vice Mirror Locations: None president and CFO of Herman’s Sporting Goods. B.A. in Hardware Platform: Dell Computer, white-box Accounting from the Chartered Accountants Institute in Operating System: Windows NT 4 England. Web Server Software: Microsoft IIS 4.0 Norman F. Hullinger, Senior Vice President of Sales and Web Servers: 30 Operations. Previously served as vice president of retail Database Platform: Oracle operations, distribution and real estate for Aaron Brothers Database Servers: 11 Art Marts, Inc. B.S. in Business Administration from the Personalization: Proprietary application, Net Perceptions University of Florida. Group Lens Recommendation Engine Merle W. McIntosh, Senior Vice President of Affiliate Management: Not used Merchandise Acquisition. Previously served as vice Payment Processing: First Data Corp. president of purchasing for Micro Warehouse, Inc.; Other Applications: Oracle Application Server, Oracle director of product management for Entex Information interMedia, Mercury Interactive WinRunner and Services, Inc.; senior purchasing manager for Wang LoadRunner, Marimba Castanet, Microsoft Passport Laboratories; and production controller for Sensormatic Electronics Corporation. OPERATING BENCHMARKS Bari M. Abdul, Senior Vice President of Marketing. Total Revenue Previously served as division marketing director at 1999...... $514.8mn PepsiCo, Inc. B.S. in engineering from the University of 1998 ...... $356.5mn California at Berkeley and MBA from The Wharton 1997...... $382.1mn School of Business, University of Pennsylvania. 1996...... $374.9mn

Sales to Repeat Customers 1999...... 71% 800.com Inc. 1998...... 74% 1516 N.W. Thurman 1997...... 69% Portland, OR 97209, U.S.A. 1996...... 51% Tel. 503-944-3600 Marketing Expenditures Fax 503-944-3690 1999...... $101.8mn 1998...... $ 62.3mn Unique Visitors (March 2000): 887,000 1997...... $ 64.9mn Reach: 1.3% 1996...... $ 66.4mn Rank: 664

Engineering Expenditures ORGANIZATION 1999...... $15.5mn Business Sector: Consumer Electronics; 1998...... $11.8mn Books/CDs/Videos 1997...... $ 7.7mn Founded: December 1997 1996...... $ 9.5mn Employees: 125 (12/99) Offline Activity Registered Bidders (end of period)1 Storefronts: None 1999...... 2,923,000 Catalogs Mailed: None 1998...... 1,506,000 Facilities: Portland, OR headquarters, Portland, OR 1997...... 669,000 fulfillment center 1996...... 169,000 Telecenter: In-house call center with 31 representatives Ownership: Private (IPO pending) 1. Egghead.com and ONSALE combined Trading Symbol: EHDC (NASDAQ) Major Shareholders: COMMENTS • Olympic Venture Partners (17%) Egghead.com is an online retailer of computer hardware • Berkman Capital (12%) and software, consumer electronics, travel services, and • APV Technology Partners (10%) sports and fitness products. The company originally • Vulcan Ventures (9.9%) operated through a chain of more than 150 bricks-and- • Trinity Ventures (9.3%) mortar stores across the U.S. In January 1998, plans were • Leverick Ltd. (6.2%) announced to close the remaining 80 storefronts and • Amerindo Investment Advisors immediately redirect the company’s entire focus towards Financing: $83.3 million in four rounds selling online. Profitable: No ($42.809 million loss for 12 months ending In March 1999, the company raised $72.9 million in 12/31/99) new equity capital from a secondary common stock offering to finance its restructuring. In April 2000, the WEBSITE OVERVIEW company sold three million shares of its common stock to Website: www.800.com Acqua Wellington to raise an additional $23 million in Site Launch: October 1998 capital. Site Type: Business-to-consumer In July 1999, the company merged with online Business Model: Fixed pricing auctioneer ONSALE. Since that time, Egghead.com’s Site Size: 1,600 (approx.) consumer electronics SKUs and principal online storefront at www.egghead.com, its 230,000 (approx.) games, movies, and music titles auction site (SurplusAuction) and its product liquidation Languages: English site (SurplusAuction) have been merged with the Accepts Advertising: No ONSALE website into a single online storefront at Site Features: General help, online real-time customer www.egghead.com. In April 2000, the company service, threaded discussions, and customer created announced plans to add office products to its storefront content through a partnership with United Stationers’ e-NITED Back-end Integration: Access to customer account Business Solutions division. information, inventory availability, order status, order Total revenue for the first quarter ending March 31, processing, payment processing, order status, and shipment 2000 was $147.8 million with a loss of $25.1 million. tracking are integrated into website. During the quarter, 66% of orders originated from repeat buyers. At the end of the quarter, the company reported that the number of registered bidders and customers exceeded 3.25 million.

54 copyright  2000 by The Intermarket Group The eCommerce Almanac

MARKETING 800.com Home Page Media: Radio and television advertising, and newspaper advertising Partnerships: • America Online Inc. (proprietary dial-up service) • America Online Inc. (www.aol.com) • America Online Inc. (www.netscape.com) • America Online Inc. (www.compuserve.com) • Della.com (www.della.com) • Earthlink Inc. (www.wizshop.com) • Excite@Home (www.excite.com) • Microsoft Corp. (www.msn.com) • Real Networks, Inc. (www.real.com) • ShopNow Network (www.shopnow.com) • wisecity.com (www.wisecity.com) • ZDnet (www.zdnet.com) Affiliate Program: 800.com Partners Program No. of Affiliates: 22,000 Commission Rate: 5% of sales for electronic products and 8% for games, movies, and music

MANAGEMENT Gregory Drew, Chief Executive Officer and President. Previously served as Portland site manager for QUALCOMM, vice president, worldwide sales and vice president and general manager of the End User Products Group of Now Software, vice president, worldwide sales of Clientele Software, Inc., and vice president, worldwide sales of Tut Systems, Inc. Robert Falcone, Senior Vice President and Chief INTERNET INFRASTRUCTURE Financial Officer. Previously served as vice president and Design Consultants: STEP Technology CFO of NIKE Inc. Site Maintenance: In-house staff Frank Sadowski, Senior Vice President, Merchandising. Hosting Arrangement: On-site server(s) Previously served as merchandise manager for the audio Access Provider: Verio Inc., Sprint Internet Services, division of Sun Television and Appliances, Inc., a regional SAVVIS Communications consumer electronics and appliance retailer. Internet Connectivity: Three fractional DS-3 lines Timothy Zuckert, Vice President and Chief Marketing Mirror Location: Planned Officer. Previously served as vice president of sales and Hardware Platform: Compaq ProLiant marketing of Disney Interactive, Inc., vice president of Operating System: Windows NT 4 Enterprise marketing of The Palace Inc., a community Web site Web Server Software: Microsoft IIS 4.0 company, vice president of marketing and president and Commerce Platform: Microsoft Site Server Commerce CEO of Virgin Sound and Vision, a software publishing Edition unit of Virgin Group PLC. Web Servers: 56 Compaq ProLiant dual processor servers Jason Palmer, Vice President, Sales and Operations. Database Platform: Microsoft SQL Server 7.0 Previously served as national sales manager of the End Database Servers: 20 Compaq ProLiant quad processor User Products Group of Now Software, channel sales servers manager for Clientele Software, and senior account Personalization: Net Perceptions Group Lens manager for Tut Systems. Recommendation Engine, Microsoft Site Server Dave Watrous, Vice President, Information Systems. Commerce Edition Previously served as an Information Systems Manager at Affiliate Management: Be Free BFAST Now Software and as technical services manager for Other Applications: Emercis Catalog Server, Epicor Advanced Information Solutions, Inc. Clientele for Customer Support, WebCriteria, Microsoft Passport, Personify Essentials, Radview Web Site Director, Segue Systems testing software

OPERATING BENCHMARKS Total Revenue1 E-LOAN Inc. 2000 (Q3) ...... $13.5mn 5875 Arnold Road 2000 (Q2) ...... $ 7.1mn Dublin, CA 94568, U.S.A. 2000 (Q1) ...... $ 3.1mn Tel. 925-241-2400 1999...... $ 3.0mn Fax 925-556-2178 Marketing Expenditures1 2000 (Q3) ...... $21.4mn Unique Visitors (March 2000): 527,000 2000 (Q2) ...... $ 6.2mn Reach: 0.8% 2000 (Q1) ...... $ 2.6mn Rank: 1,389 1999...... $ 8.9mn ORGANIZATION Technology Expenditures1 Business Sector: Banking/Brokerage/Financial services 2000 (Q3) ...... $1.1mn Founded: 1997 2000 (Q2) ...... $0.8mn Employees: 350 2000 (Q1) ...... $0.6mn Offline Activity 1999...... $1.2mn Storefronts: None Catalogs Mailed: None 1. Fiscal year ending March 31 Facilities: • Dublin, CA headquarters • Jacksonville, FL auto loan processing facility Telecenter: In-house call center Ownership: Public Trading Symbol: EELN Major Shareholders: • Benchmark Capital (21%) • Chris Larsen, CEO (14%) • Janina Pawlowski, Chairman (14%) • Technology Partners (12%) • Softbank Holdings (9%) • Bank of America (5%) Financing: $249.74 million Profitable: No ($72.975 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.eloan.com Site Launch: June 1997 Site Type: Business-to-consumer Business Model: Commission-based Site Size: 50,000 loan offerings from 70+ lenders; available in 50 states and Washington, DC Languages: English, German, French, Japanese Accepts Advertising: No Site Features: General help, contextual help, and online real-time customer service Back-end Integration: Access to customer account information, transaction processing, payment processing, and transaction status are integrated into website.

MARKETING Media: Radio and television advertising Partnerships: • Access Technology Services Inc. (www.homeweb.com) • Autobytel.com Inc. (www.autobytel.com)

56 copyright  2000 by The Intermarket Group The eCommerce Almanac

• AutoConnect (www.autoconnect.com) E-LOAN Home Page • AutoTrader (www.autotrader.com) • CitiQuest.com (www.citiquest.com) • Consumer Financial Network (www.youdecide.com) • E*Trade Group, Inc. (www.etrade.com) • FirstUSA (www.wingspan.com) • GoTo.com (www.goto.com) • Homes & Land Publishing Ltd. (www.homes.com) • HomeSmart USA (www.homesmart.com) • H&R Block (www.hrblock.com) • InsWeb Corp. (www.insweb.com) • Intelligent Life, Inc. (www.bankrate.com) • Kelly Blue Book (www.kbb.com) • LoanWise.com (www.loanwise.com) • MarketWatch.com Inc. (www.marketwatch.com) • MichaelHoligan.com Ltd. (www.yournewhouse.com) • Microsoft Corp. (www.carpoint.com) • Morningstar, Inc. (www.morningstar.com) • Motley Fool Inc. (www.motleyfool.com) • NetB@nk Inc. (www.netbank.com) • NetNoir Inc. (www.netnoir.com) • NextCard, Inc. (www.nextcard.com) • Owners.com Inc. (www.owners.com) • Prodigy (www.prodigy.net) • RE/MAX International (www.remax.com) • Road Runner (www.rr.com) • Charles Schwab & Company (www.schwab.com) • SeniorCom Inc. (www.senior.com) • Smart Money (www.smartmoney.com) • Stockmaster.com Inc. (www.stockmaster.com) • Talkway Inc. (www.talkway.com) • Time Inc. (www.money.com) Frank M. Siskowski, CFO. Previously served in various • USATODAY.com (www.usatoday.com) senior financial positions at Visa International, MCI • Yahoo!, Inc. (www.yahoo.com) Communications Corp., PepsiCo, Inc. and Indus Affiliates Program: CarFinance.com Affiliate Program International. Number of Affiliates: 300+ Steve Peterson, Chief Technology Officer. Previously Commission Rate: Fixed fee per application served as acting CTO at World Pages and vice president of product development at eShop. MANAGEMENT Bill Crane, Senior Vice President of Engineering. Christian Larsen, CEO and co-founder. Previously Previously held the same position at FrontOffice founded Palo Alto Funding Group, a mortgage brokerage Technologies and at Network Computing Devices and firm and served in various positions at Chevron Corp. and served in various management positions at Sun NASA Ames Research. B.S. from San Francisco State and Microsystems and IBM. B.S. in Computer Science from M.B.A. from Stanford University. Texas A&M University. Janina Pawlowski, Chairman of the Board and co- Cameron King, Senior Vice President of Integrated founder. Previously co-founded Palo Alto Funding Group Technology. Previously served as executive vice president and served in various marketing positions with Xerox of Countrywide's E-Commerce Division. Graduate of the Corp. B.S. from Cornell University and M.B.A. from the University of Southern California. University of Rochester. Larry Fried, Vice President of Business Technology. Joseph Kennedy, President and COO. Previously Vice Previously Homeshark's (iOwn) first employee responsible President of Sales, Service and Marketing for Saturn for building and overseeing their mortgage operations. Corporation. B.S.E. from Princeton University and an B.S. in Civil Engineering and M.B.A. from the University M.B.A. from Harvard Business School. of California at Berkeley.

Sharon Ruwart, Vice President of Marketing. Previously Total Loans Closed (Loan value) held a variety of positions at Knight-Ridder, Inc, where she 1999...... $ 1.63bn managed the $100 million recruitment classified business 1998...... $982.2mn at one property and oversaw the development and launch 1997...... $105.1mn of several online services and print products. M.B.A. from Stanford University. COMMENTS Douglas Galen, Vice President of Business Development. E-LOAN is one of the original web-based loan brokers. Previously served as vice president of business The company was founded in 1997 as an online mortgage development at Abele Owners' Network and in executive broker and has since expanded to offer credit cards, auto positions at Limar Realty and The Shidler Group. loans, and small business loans. In addition to offering Undergraduate and M.B.A. degrees from University of consumers access to a variety of third-party lenders, the California, Berkeley. company also underwrites and funds a large percentage of its loans and sells the servicing value in the capital INTERNET INFRASTRUCTURE markets. Design Consultants: None The company reported $7.11 million in revenue for the Site Maintenance: In-house staff first quarter ending March 31, 2000 with a loss of $24.78 Hosting Arrangement: Co-located server(s) million. Access Provider: Exodus Communications Inc. International subsidiaries have been established to serve Internet Connectivity: Multiple T-1 lines markets in the U.K. (E-LOAN Ltd.) and Australia (E- Mirror Locations: None LOAN Pty. Ltd.) in partnership with SOFTBANK and Hardware Platform: Sun Microsystems News Corp., in Germany and France (E-LOAN N.V.) in Operating System: Solaris UNIX partnership with SOFTBANK and Vivendi, and in Japan Web Server Software: Apache (E-LOAN Japan K.K.) in partnership with SOFTBANK. Commerce Platform: E-Loan loan processing engine In October 1999, @viso -- a joint venture of SOFTBANK Web Servers: One and Vivendi -- acquired a 37% stake in E-LOAN N.V. for Database Platform: Oracle a $26 million equity investment. @viso also agreed to Database Servers: One assist the company in entering the European market by Personalization: E-Loan loan processing engine identifying local competitors and potential partners and by Affiliate Management: Proprietary application providing local infrastructure, strategic marketing, and Payment Processing: CyberCash personnel. Other Applications: LivePerson real-time customer In August 1999, the company acquired Electronic service chat Vehicle Remarketing and its CarFinance.com online auto financing website from Bank of America for 2.88 million OPERATING BENCHMARKS shares of E-LOAN common stock, providing a platform Total Revenue for entry into auto financing. In October 1999, the 1999...... $22.10mn company partnered with LoanWise.com, providing E- 1998...... $ 6.83mn LOAN customers access to small business loans and 1997...... $ 1.04mn referring LoanWise.com visitors to the E-LOAN website for mortgage financing. A similar partnership with Marketing Expenditures Providian Financial enabled the company to offer credit 1999...... $30.29mn cards through the E-LOAN website. In October 1999, the 1998...... $ 5.70mn company’s E-LOAN Ltd. subsidiary acquired U.K.-based 1997...... $ 0.47mn loan broker Flexmortgage.com. In March 2000, E-LOAN N.V. acquired Media Kreditbank, a German bank, and the Technology Expenditures French online lender Aaccrédit. 1999...... $3.60mn The company received an equity investment in January 1998...... $1.35mn 1999 from online securities broker E*TRADE Group. In 1997...... $0.10mn April 2000, the company received an additional $40 million in equity capital from an investor group comprised Total Loans Closed (No. of loans) of Charles Schwab & Company, Abbey National, and FT 1999...... n/a Ventures, which contributed $10 million each, and 1998...... 4,951 Benchmark Capital and Technology Partners, which 1997...... 448 contributed $5 million each. A related agreement enables the company to provide mortgage services to Schwab customers through the online broker's website.

58 copyright  2000 by The Intermarket Group The eCommerce Almanac

eToys Inc. eToys Home Page 3100 Ocean Park Blvd., Suite 300 Santa Monica, CA 90405, U.S.A. Tel. 310-664-8100

Unique Visitors (March 2000): 1,158,000 Reach: 1.5% Rank: 645

ORGANIZATION Business Sector: Toys, Books/Videos Founded: November 1997 Employees: 940 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Santa Monica, CA headquarters • Commerce, CA distribution center • Ontario, CA distribution center • San Francisco, CA distribution center • Greensboro, NC distribution center • Pittsylvania County, VA distribution center • Swindon, U.K. distribution center • Belgium distribution center in process • San Francisco, CA BabyCenter headquarters Telecenter: In-house call center; online support outsourced to PeopleSupport Ownership: Public Trading Symbol: ETYS (NASDAQ) Major Shareholders: • idealab! • Highland Capital • Sequoia Capital • Intel Corp. • DynaFund Ventures • Capital Partners Financing: $724.2 million in four rounds, IPO, subordinated convertible debt offering, and private placement of convertible preferred shares Profitable: No ($189.627 million loss for FY ’00)

WEBSITE OVERVIEW Website: www.etoys.com, www.toys.com, Back-end Integration: Access to customer account www.etoys.co.uk information, order history, inventory availability, order Site Launch: November 1997 processing, and payment processing, order status, and Site Type: Business-to-consumer shipment tracking, integrated into website. Business Model: Fixed pricing Site Size: 10,000 (approx.) product SKUs from 750+ MARKETING manufacturers and 80,000 (approx.) book titles Media: Television advertising, consumer periodical Languages: English advertising, newspaper advertising Accepts Advertising: No Partnerships: Site Features: General help, one-click ordering/quick buy, • America Online (Proprietary dial-up service) customer created content • America Online (www.aol.com) copyright  2000 by The Intermarket Group 59 The eCommerce Almanac

• AppCity Corp. (AppCity Shoplayer) Graduate of Cornell University and M.B.A. from the • Excite, Inc. (www.excite.com) Harvard Business School. • GiftCertificates.com (www.giftcertificates.com) Ruben Rodriguez, Vice President, International. • Lycos, Inc. (www.lycos.com) Previously served as a project manager for The Boston • Go Network (www.infoseek.com) Consulting Group and as a second vice president and • Moms Online, Inc. (www.momsonline.com) merchant banking officer for Chase Manhattan Bank, Latin America. B.S. from Princeton University, M.S. in • ShopperConnection (www.shopperconnection.com) Engineering from the University of California at Berkeley, • USA Today Online (www.usatoday.com) and M.B.A. from Stanford University. • WingspanBank (www.wingspan.com) Jane Saltzman, Vice President of Merchandising. • Yahoo!, Inc. (www.yahoo.com) Previously served as merchandise manager at toy retailer Affiliates Program: eToys Affiliate Program Imaginarium and in various buying and sales management No. of Affiliates: n/a positions at Macy’s California. Graduate of Oberlin Commission Rate: $10 for each new customer making College. a qualified purchase Kayne Grau, Director of Technical Services

MANAGEMENT INTERNET INFRASTRUCTURE Toby Lenk, Chief Executive Officer. Former vice Outside Consultants: Oracle Consulting Services, IBM president in the Strategic Planning Group of the Walt Site Maintenance: In-house staff Disney Company and strategy consultant at the L|E|K Hosting Arrangement: Co-located server(s) Partnership. Summa cum laude graduate of Bowdoin Access Provider: Frontier Global Center College and MBA from Harvard Business School Internet Connectivity: Multiple DS-3 lines Frank Han, Senior Vice President of Product Mirror Locations: One Development. Previously served as vice president and Hardware Platform: Sequent, VA Linux Systems manager of the Interactive Markets Department at Union Operating System: Linux, UNIX Bank and in various positions in investment banking and Web Server Software: Apache/Stronghold corporate development for Salomon Brothers, Donaldson, Commerce Platform: Proprietary applications Lufkin & Jenrette, and Mission Energy Company. Web Servers: Multiple VA Linux servers Graduate of Yale University and M.B.A. from the Stanford Application Servers: Four Sequent NUMA-Q 2000 data Graduate School of Business. and web applications servers John Hnanicek, Senior Vice President and Chief Database Platform: Oracle 8i Information Officer. Previously served as senior vice Database Servers: See “Application Servers” above president of information systems for Hollywood Personalization: Net Perceptions Group Lens Entertainment, CIO for Homeplace, and senior vice Affiliate Management: BeFree BFAST president of Information Systems and Logistics at Payment Processing: CyberCash, proprietary applications OfficeMax. B.S. in Computer Science and Accounting Other Applications: Personify Essentials, Red Cart from Cleveland State University. Universal Shopping Cart, Mercury Interactive WinRunner, Frank Han, Senior Vice President of Product Computer Associates Unicenter TNG, Kana Solution Development. Previously served as vice president of customer support interactive markets and as director of strategic planning at Union Bank of California. B.S. from Yale University and OPERATING BENCHMARKS M.B.A. from Stanford University. Total Revenue1 Janine Bousquette, Senior Vice President of Marketing. 2000...... $151.04mn Previously served as vice president of marketing for 1999...... $ 29.96mn PepsiCo Inc. and in brand management at The Procter & 1998...... $ 0.69mn Gamble Company. B.A. from the University of Michigan. Louis Zambello, Senior Vice President of Operations. Marketing and Sales Expenditures1 Previously served in a variety of positions at L.L. Bean, 2000...... $120.46mn including senior vice president of operations and creative, 1999...... $ 20.72mn senior vice president of operations and vice president of 1998...... $ 3.74mn merchandise services and manufacturing. B.A. from Cornell University and M.B.A. from Harvard Business Technology Expenditures1 School. 2000...... $43.43mn Stephen Paul, Vice President of Business Development. 1999...... $ 3.61mn Previously served as an associate in the Investment 1998...... $ 1.10mn Banking Group at Donaldson, Lufkin & Jenrette and in the Strategic Planning Group at Walt Disney Company.

60 copyright  2000 by The Intermarket Group The eCommerce Almanac

Total Customers (end of period) 1 2000...... 1,900,000 E*TRADE Group, Inc. 1999...... 365,000 4500 Bohannon Drive 1998...... n/a Menlo Park, CA 94025, U.S.A. Tel. 650-331-6000 1. Fiscal year ending March 31

COMMENTS Unique Visitors (March 2000): 2,461,000 eToys is the Internet’s leading toy retailer with almost Reach: 3.6% twice the number of visitors as its closest competitor, Rank: 212 Toysrus.com. The company reported $151 million in revenue for the most recent fiscal year; 49% of its fourth quarter revenues were generated by repeat customers. The company also ORGANIZATION reported that 47% of the $120 million it spent for sales and Business Sector: Securities brokerage marketing in the latest fiscal year went to advertising while Founded: 1982 the balance went to fulfillment, customer service and credit Employees: 2,400 (3/31/00) card fees. The average order amount for FY 2000 was $62 Offline Activity and average customer acquisition cost was $36. Out of the Storefronts: None 1.5 million new customers added during FY 2000, 226,800 Catalogs Mailed: None were added during the fourth quarter (Jan. 1 through Mar. Facilities: 31) at an average acquisition cost of $24 each. • Menlo Park, CA headquarters and data center The company raised an additional $97.5 million of • Rancho Cordova, CA data center equity capital in June 2000 through a private placement of • Alpharetta, GA data center Convertible Preferred Shares and related warrants among Telecenter: In-house call center with 1,000+ several institutional investors. representatives In May 2000, the company announced plans to add two Ownership: Public new product categories -- party goods and hobbies -- to its Trading Symbol: EGRP (NASDAQ) website before year-end. The site already covers seven Major Shareholders: product categories: toys, books, software, music, videos, • General Atlantic Partners LP video games, and baby products. Plans for two new • Softbank content channels for parents and for kids were announced • William Porter, Founder at the same time; the company expects the new content to • Christos Cotsakos, President and CEO be available before the 2000 holiday season. Shareholder Equity: $1.862 billion In March 1998, the Company acquired the operations Profitable: No ($27.98 million loss for six months ending and domain name of Toys.com for $270,000 in cash and 3/31/00) 2,340,000 shares of eToys common stock. The company acquired BabyCenter, Inc. in April 1999 WEBSITE OVERVIEW for 16.7 million shares of eToys common stock. The Website: www.etrade.com, www.etradebank.com, BabyCenter web site provides a variety of information, www.efn.net products and interactive forums focused on and serving Site Launch: February 1996 expectant mothers and new parents. Site Type: Business-to-consumer Business Model: Commission-based Site Size: U.S. stocks, options, IPOs, treasury securities, listed corporate bonds, and 5,000+ mutual funds Languages: English, French, Japanese, Korean, Swedish, Danish Accepts Advertising: Yes Site Features: General help, contextual help, threaded discussions, real-time customer-to-customer chat, foreign language information and order pages Back-end Integration: Access to customer account information, transaction history, transaction processing, and transaction status are integrated into website.

MARKETING E*TRADE Home Page Media: Television advertising, consumer and business periodical advertising, direct mail Partnerships: • America Online (Proprietary dial-up service) • America Online (www.compuserve.com) • CNBC (www.cnbc.com) • Earthlink (www.earthlink.com) • Egghead.com Inc. (www.egghead.com) • Healtheon/WebMD (www.webmd.com) • Marketwatch.com (www.marketwatch.com) • Microsoft Corp. (investor.msn.com) • Netcentives Inc. (www.clickrewards.com) • The Motley Fool (www.fool.com) • TheStreet.com (www.street.com) • Yahoo!, Inc. (www.yahoo.com) • Delta Airlines • Hilton HHonors Worldwide • Intuit Inc. (link to Quicken software) • Microsoft Corp. (link to MS Money software) • OracleMobile (www.oraclemobile.com) • United Airlines • Zones (PCZone and MacZone catalogs) Affiliates Program: None

MANAGEMENT Christos Cotsakos, Chairman and Chief Executive Officer. Previously served as president, co-chief executive officer, and chief operating officer of A.C. Nielsen, Inc., president and CEO of Nielsen International, president and controller of Jefferies & Company, Inc. B.A. in statistics COO of Nielsen Europe, Middle East and Africa, and in and economics from the University of California at Davis various senior executive positions at Federal Express Corp. and M.B.A. from the University of California at Los B.A. from William Paterson College and M.B.A. from Angeles. Pepperdine University. Mitchell H. Caplan, Chief Banking Officer Kathy Levinson, President and Chief Operating Officer. Tom Bevilacqua, Chief Corporate Development and Previously served as a consultant to E*Trade and in Strategic Investment Officer various positions at Charles Schwab & Company, Connie Dotson, Chief Service Quality Officer including senior vice president of custody services and Jerry Gramaglia, Chief Marketing Officer senior vice president of credit service. B.A. in economics Amy Errett, Chief Asset Gathering Officer from Stanford University. Joshua Levine, Chief Information Officer Judy Balint, Chief International Officer. Previously Pam Kramer, Chief Content Development Officer served as a senior vice president and corporate director of Len Purkis, Chief Financial Officer marketing for National Processing Company, consultants Michael Sievert, Vice President of Marketing in transaction technology, CEO Paris and managing Richard Stalzer, Vice President of Advertising Sales director of CME-KHBB Transactional Advertising, a unit of Saatchi & Saatchi Group, and various positions at INTERNET INFRASTRUCTURE Federal Express Corp. and DHL Worldwide Express. B.A. Design Consultants: Ft. Point Partners, Novo Corp., in journalism from the University of Wisconsin, Madison, Sapient and M.B.A. from the Monterey Institute of International Site Maintenance: In-house staff Studies. Hosting Arrangement: On-site server(s) and co-located Stephen Richards, Chief Online Trading Officer. server(s) Previously served in various positions at Bear Stearns & Access Provider: Genuity, UUNET/MCI Worldcom, Company, including managing director and CFO of Electric Lightwave, Digital Island (Local Content Correspondent Clearing, vice president and deputy Manager) controller of Becker Paribas, and first vice president and Internet Connectivity: Multiple DS-3 lines

62 copyright  2000 by The Intermarket Group The eCommerce Almanac

Mirror Locations: Two Technology Expenditures1 Hardware Platform: Sun Microsystems 2000 (Q1-Q2) ...... $78.5mn Operating System: Solaris UNIX 1999...... $76.9mn Web Server Software: Netscape Enterprise Server 1998...... $33.7mn Commerce Platform: Netscape Application Server, 1997...... $13.5mn E*Trade Engine 1996...... $ 4.7mn Web Servers: 300+ Sun Enterprise 250, 450, and 6500 servers 1. Fiscal year October 1 – September 30 Database Platform: Oracle 8i 2. Core brokerage accounts at end of fiscal period Personalization: E*Trade Engine Affiliate Management: Not used COMMENTS Transaction Processing: E*Trade Engine E*TRADE Group is the largest of the so-called Other Applications: BEA Systems Tuxedo and Manager, Internet-only securities brokers. The company’s website, Resonate load balancing software, NCR Teradata Active Destination E*TRADE, is being positioned as a personal Warehouse, net.Genesis net.Analysis, Clarify finance portal, offering a variety of research resources and eFrontOffice, AskJeeves search, Zantaz.com DigitalSafe access to a full menu of financial services from securities remote storage, Critical Path e-mail outsourcing trading to insurance and mortgage financing. The company’s web presence also includes branded sites in OPERATING BENCHMARKS Australia, Canada, Denmark, France, Japan, Korea, New Zealand, Sweden, the U.K. Net Revenue1 2000 (Q1-Q2)...... $675.1mn In June 1999, the company acquired Telebanc Financial 1999...... $621.4mn Corp. and its pure-play Internet banking unit, Telebank, for 1998...... $335.8mn $1.8 billion in E*TRADE common stock. The transaction closed in January 2000. At the end of March 2000, 1997...... $234.1mn th 1996...... $141.8mn Telebank was the 35 largest federally chartered savings bank with $3.2 billion in assets; the number of active Customer Assets (end of period)2 banking accounts was 170,584, up from 57,946 one year 2000 (Q1-Q2)...... $62.0bn earlier. In April 2000, Telebank was integrated into the 1999...... $28.0bn company’s website and renamed E*TRADE Bank. 1998...... $11.2bn E*TRADE established a bricks-and-mortar presence in 1997...... $ 7.7bn March 2000 with the acquisition of Card Capture Services 1996...... $ 2.6bn and its network of 8,500 automated teller machines across the U.S. The company has announced plans to turn the Customer Accounts (end of period)1 ATMs into a network of financial kiosks which deliver a 2000 (Q1-Q2)...... 2,443,416 variety of services to customers. In May 2000, a multi- 1999...... 1,551,000 channel marketing alliance was announced with Target 1998...... 544,000 Stores providing for an in-store pilot of one E*TRADE 1997...... 225,000 financial service center at a Roswell, Georgia SuperTarget 1996...... 91,000 store and for cross-promotion between etrade.com, target.com, and the Target Stores. Transactions (avg. trades per day)1 The company has aggressively embraced non- 2000 (Q1-Q2)...... 181,000 traditional trading venues. It was the first online broker to 1999...... 68,484 offer after-hours trading through its August 1999 1998...... 27,620 agreement with Instinet, an off-exchange trading network - 1997...... 16,356 - or Electronic Communication Network (ECN) -- for 1996...... 6,148 institutional investors and broker/dealers. In November 1998, the company announced an investment in the International Securities Exchange (ISE), a fully electronic Marketing Expenditures1 2000 (Q1-Q2)...... $307.2mn options marketplace that combines electronic trading and 1999...... $301.7mn auction market principles. In January 1999, the company 1998...... $117.3mn purchased a 25% stake in Archipelago, the operator of an 1997...... $ 67.3mn ECN for trading Nasdaq stocks. In October 1999, a 1996...... $ 52.4mn strategic investment in the EASDAQ (European

Association of Securities Dealers Automated Quotation) Other recent events include the July 1999 launch of a co- electronic exchange was announced along with the branded by-owner real estate service in partnership with company’s participation as a member of the EASDAQ's Owners.com; the March 2000, launch of E*TRADE International Advisory Board. Account Express which enables customers to open and The company has also aggressively pursued fund an account online with up to $2,000 and begin trading international expansion. Since 1998, it has launched almost immediately; an April 2000 agreement with E*TRADE Korea in partnership with SOFTBANK and LG Verizon Wireless providing the company’s customers Investment & Securities; launched E*TRADE Danmark wireless access to transaction capabilities, account services with Danish broker Difko BØrsmæglerselskab A/S; and real-time financial information; and an April 2000 launched E*TRADE Germany AG with Berliner partnership with SINA.com to launch co-branded Chinese- Effektenbank AG and New York Broker Germany AG; language banking services through the company’s launched E*TRADE Japan K.K. with SOFTBANK, Telebank subsidiary. launched E*TRADE Australia in partnership with Nova The company has content agreements with Reuters, Pacific Capital, launched E*TRADE Canada with MarketWatch.com, Renaissance Capital, BigCharts, VERSUS Technologies, launched CPR-E*TRADE with TheStreet.com, ProfessionalEdge, and Morningstar. In French investment bank CPR. The company acquired April 2000, the company launched “E*TRADE: The 100% of E*TRADE Nordic AB, its master licensee for the Magazine,” in partnership with Imagination Publishing and Nordic countries, in October 1999. In November 1999, it distributed to customers quarterly. acquired 100% of E*TRADE @ NetBourse S.A., its licensee for Belgium, the Netherlands, Luxembourg, Austria, and Italy; and announced a partnership with E- data Holdings Ltd. to establish E*TRADE Africa in South Africa. In January 2000, the company acquired 100% of E*TRADE UK from partner Electronic Share Information. Recent acquisitions include OptionsLink, which provides web-based and interactive voice response inquiry and order entry system services for companies offering employee stock option and stock purchase plans; ShareData, which supplies stock plan software and consulting services; ClearStation, which operated a financial content website; Confluent Inc. and its Abrio calendar engine; and TIR (Holdings) Ltd., a broker which trades equities, fixed income securities, currencies, and derivatives in more than 35 countries. Strategic investments include online insurance broker E-Coverage, e-mail services provider Critical Path, Garage.com, clearing services firm Knight Trimark, Message Media, and Digital Island. The company also announced an equity investment in E-LOAN in March 1998 along with a three-year agreement designating the online loan broker exclusive multi-lender partner to E*TRADE customers; and an August 1999 investment in online mortgage banker LoanCity.com. A partnership was announced in January 1999 with Sandy Robertson -- founder and former CEO of Robertson, Stephens & Company -- and Walter Cruttenden -- former CEO of Cruttenden Roth -- to form a full-service online investment bank, E*OFFERING. E*TRADE also purchased a 28% stake in the new company which was subsequently sold to WitSoundView in May 2000. In April 2000, the company made a strategic investment in Everypath, Inc., a wireless application services provider that will be used by the company to deliver financial applications, content, and services to customers’ wireless data devices.

64 copyright  2000 by The Intermarket Group The eCommerce Almanac

Expedia, Inc. Expedia Home Page 13810 SE Eastgate Way, Suite 400 Bellevue, WA 98005, U.S.A. Tel. 425-564-7200

Unique Visitors (March 2000): 4,265,000 Reach: 6.3% Rank: 83

ORGANIZATION Business Sector: Travel services Founded: July 1994 Employees: 200 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: Bellevue, WA headquarters Telecenter: Outsourced to Online Fulfillment Services; 250+ representatives Ownership: Public Trading Symbol: EXPE (NASDAQ) Major Shareholders: • Microsoft Corp (85%) Financing: $192 million corporate financing and IPO Profitable: No ($75.9 million loss for 9-months ending 3/31/00)

WEBSITE OVERVIEW Website: www.expedia.com; International sites: expedia.co.uk, expedia.de, expedia.msn.ca Site Launch: October 1996 Site Type: Business-to-business, business-to-consumer Business Model: Fixed pricing Site Size: Travel reservations for 450 airlines, 40,000 hotels, and all major car rental agencies Languages: English, German Accepts Advertising: Yes Site Features: General help, one-click ordering/quick buy, threaded discussions, customer-to-customer chat, foreign language information pages, foreign language order pages Back-end Integration: Access to customer account information, inventory availability, order processing, payment processing, and order status are integrated into website. MARKETING MANAGEMENT Media: Radio and television advertising, newspaper Richard Barton, President and Chief Executive Officer advertising; consumer periodical advertising planned Gregory Stanger, Vice President and Chief Financial Partnerships: Officer • BarnesandNoble.com (www.barnesandnoble.com) Byron Bishop, Vice President of Product Development • Microsoft Corp. (www.msn.com) Erik Blachford, Vice President of Marketing • Netcentives Inc. (www.clickrewards.com) Simon Breakwell, Vice President of Sales Affiliate Program: None Mike Quin, Director of E-commerce

INTERNET INFRASTRUCTURE VacationSpot.com in January for 2.6 million shares of Design Consultants: None Expedia stock worth approximately $82 million. Site Maintenance: In-house staff VacationSpot.com operates an online reservation network Hosting Arrangement: Co-located server(s) for vacation homes, rental condos, inns and bed & Access Provider: Microsoft Corp. breakfasts. Internet Connectivity: Eight shared DS-3 lines The company announced a partnership with Microsoft Mirror Locations: None Network in February 2000 to provide flight status, travel Hardware Platform: Compaq ProLiant itinerary information, and driving directions to web- Operating System: Microsoft Windows NT enabled cellular phones via the MSN Mobile Service 2.0 Web Server Software: Microsoft IIS beginning in April 2000. Commerce Platform: Proprietary web booking engine; In April 2000, the company announced a partnership Microsoft Site Server Commerce Edition with LiquidGolf.com which will serve as the first golf Web Servers: Multiple ProLiant servers equipment dealer on the Expedia site. LiquidGold.com is Database Platform: Microsoft SQL Server an Internet-based on-line country club offering news, Database Servers: Two ProLiant servers information, entertainment and golf products. Personalization: Microsoft Site Server Commerce Edition Affiliate Management: Not used

OPERATING BENCHMARKS Total Revenue1 2000 (9 mos.) ...... $64.96mn 1999...... $38.70mn 1998...... $13.83mn 1997...... $ 2.74mn

Marketing Expenditures1 2000 (9 mos.) ...... $38.67mn 1999...... $14.89mn 1998...... $10.82mn 1997...... $ 8.82mn

Technology Expenditures1 2000 (9 mos.) ...... $14.61mn 1999...... $21.18mn 1998...... $18.51mn 1997...... $16.21mn

1. Fiscal year ending June 30th

COMMENTS Expedia is the one of the leading online travel agencies. The company was founded in 1994 as a unit of Microsoft Corp. (NASDAQ: MSFT) and spun-out as a publicly- traded company in November 1999. Microsoft remains the company’s largest shareholder, with its 85% stake. In June 1999, the company launched Expedia Radio, a weekly, one-hour radio program providing travel news and ideas and celebrity guest interviews. The show is now nationally-syndicated into the top 20 U.S. markets and is carried on the networks of CBS/Infinity Broadcasting and Clear Channel Communications. In January 2000, the company acquired Travelscape.com for three million shares of Expedia common stock worth approximately $95 million. Travelscape.com is an online hotel consolidator which offers discounted rooms at more than 1,200 hotels in 240 cities worldwide. The company also acquired

66 copyright  2000 by The Intermarket Group The eCommerce Almanac

FastParts.com FastParts Home Page 133A Bernal Rd. San Jose, CA 95119, U.S.A. Tel. 408-360-1340 Fax 408-360-9119

Unique Visitors (March 2000): n/a Reach: n/a Rank: n/a

ORGANIZATION Business Sector: Electronic parts and equipment Founded: 1991 Employees: 36 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: San Jose, CA headquarters Telecenter: None Ownership: Private Trading Symbol: None Major Shareholders: • Gerry Haller, Founder INTERNET INFRASTRUCTURE • Draper Fisher Jurvetson Design Consultants: None • SOFTBANK Venture Capital Site Maintenance: In-house staff • Synergy Ventures Hosting Arrangement: Co-located server(s) • INVESCO Private Capital Access Provider: Qwest Communications Financing: $35 million (approx.) in four rounds Mirror Locations: None Profitable: No Hardware Platform: Sun Microsystems Operating System: Solaris WEBSITE OVERVIEW Web Server Software: Apache Website: www.fastparts.com Commerce Platform: Proprietary application Site Launch: May 1996 Web Servers: One Site Type: Business-to-business Database Platform: Oracle Business Model: Negotiated pricing/auction Database Servers: One Languages: English Personalization: Planned Accepts Advertising: No Affiliate Management: Not used Site Features: General help, contextual help Payment Processing: Proprietary application Back-end Integration: Access to customer account information, inventory availability, and order processing COMMENTS are integrated into website. FastParts operates an online marketplace for electronic components, enabling OEMs, contract assemblers, MARKETING manufacturers, and distributors to trade surplus electronic Media: Business periodical advertising and direct mail parts and equipment. Partnerships: None The company offers four members-only services Affiliates Program: None through its website: The FastParts.com Trading Exchange provides an anonymous, real-time virtual trading floor MANAGEMENT where buyers and sellers of electronic parts can directly George Gordon, President and Chief Executive Officer negotiate and conduct trades. FastParts coordinates all John Spensieri, Sr. Vice President, Sales and Marketing trade fulfillment activities, including payment and Tim Lavelle, Vice President, Business Development delivery, in return for a percentage of each completed Charles Huh, Vice President, Finance and Strategy transaction. SOLD! Internet Auctions are online auctions Jaleh Gazzi, Vice President, Market Strategy which are pre-announced to all members and offer

copyright  2000 by The Intermarket Group 67 The eCommerce Almanac products for immediate sale. An Equipment Exchange enables members to buy and sell new and used FirstAuction manufacturing equipment in a manner similar to the Internet Shopping Network, Inc. FastParts.com Trading Exchange. A Branded Supply 500 Macara Avenue Channel service enables individual manufacturers and Sunnyvale, CA 94086, U.S.A. suppliers to sell their products over the Internet through customized sites built on top of the FastParts.com Tel. 408-617-7400 commerce engine. The Branded Supply Channel allows Fax 408-617-7415 companies to control their product and pricing, offer contract pricing for designated customers, and outsource Unique Visitors (March 2000): 1,018,000 the coordination of all trade fulfillment activities -- Reach: 1.5% including shipping, payment, and collection -- to FastParts. Rank: 661

ORGANIZATION Business Sector: General Merchandise Founded: February 1994 Employees: 146 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: Sunnyvale, CA headquarters Telecenter: In-house call center Ownership: Private Trading Symbol: none Major Shareholders: Subsidiary of Home Shopping Network (NYSE: HSN) Financing: n/a Profitable: No ($42.39 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.firstauction.com Site Launch: June 1997 Site Type: Business-to-consumer Business Model: Auction/Negotiated pricing Site Size: 1,000+ auctions per day Languages: English Accepts Advertising: Yes Site Features: General help, one-click ordering/quick buy Back-end Integration: Access to customer account information, order history (7 days only), inventory availability, order processing, and order status are integrated into website.

MARKETING Media: No offline advertising used Partnerships: • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.netscape.com) • America Online (www.compuserve.com) • Excite@Home (www.home.com) • MyPoints.com Inc. (www.mypoints.com) Affiliates Program: None

68 copyright  2000 by The Intermarket Group The eCommerce Almanac

MANAGEMENT FirstAuction Home Page Bill Lane, Chief Operating Officer Edward Zinser, Senior Vice President and Chief Financial Officer Robert Lambert, Vice President and General Manager, FirstAuction Bruce M. Goldstein, Vice President, Sr. Product and Planning Officer Paul Hammer, Vice President, Engineering Jack Kaplen, Vice President, Operations

INTERNET INFRASTRUCTURE Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) Access Provider: Genuity Inc. Internet Connectivity: Two DS-3 lines and multiple T-1 lines Hardware Platform: Sun Microsystems Operating System: Solaris 2.5.1 UNIX Web Server Software: Netscape Enterprise Server 2.01 Commerce Platform: Netscape Application Server, proprietary applications Web Servers: Multiple dual-processor Sun Ultra software; the operation was discontinued by the company Enterprise 2 servers in 1999. Database Platform: Oracle 7 Internet Shopping Network reported $6.09 million in Database Servers: One 12-processor Sun Ultra Enterprise revenue for the first quarter ending March 31, 2000 with a 5000 server loss of $10.06 million. Personalization: BroadVision One-to-One In January 2000, an agreement was announced to merge Affiliate Management: Not used Internet Shopping Network -- and its FirstAuction and Payment Processing: Proprietary application FirstJewelry properties -- with Styleclick.com to create a new company named Styleclick, Inc. The merger OPERATING BENCHMARKS agreement also provides for USA Networks Interactive, a Total Revenue1 subsidiary of USA Networks, Inc. (NASDAQ: USAI) and 1999...... $24.62mn the parent of Home Shopping Network, to invest $40 1998...... $21.19mn million in cash and contribute an additional $10 million in 1997...... $12.86mn dedicated media to the new company.

Registered Bidders 1999...... 434,000 1998...... 260,000 1997...... n/a

1. 1999 includes results of both FirstAuction and First Jewelry; 1998 and 1997 include results of both FirstAuction and ISN.com site.

COMMENTS FirstAuction is the principal e-commerce site of Internet Shopping Network (ISN), a unit of the TV home shopping giant, Home Shopping Network. ISN’s other Internet storefront is FirstJewelry, an online jewelry retailer launched in October 1999. The FirstAuction and FirstJewelry websites each employ its own Internet infrastructure. ISN’s original online storefront was launched in April 1994 at www.isn.com and offered computer hardware and

Fogdog Inc. FogDog Home Page 500 Broadway Redwood City, CA 94063, U.S.A. Tel. 650-980-2500 Fax 650-980-2600

Unique Visitors (March 2000): 1,006,000 Reach: 1.5% Rank: 572

ORGANIZATION Business Sector: Toys/Sporting goods Founded: October 1994 Employees: 137 (12/31/99) Offline Activity: Storefronts: None Catalogs Mailed: None Facilities: • Redwood City, CA headquarters • Richmond, Surrey, U.K. FogDog International offices Telecenter: None Ownership: Public Trading Symbol: FOGD (NASDAQ) Major Shareholders • Venrock Associates • Draper Fisher Jurvetson • J.H. Whitney & Co. • Vertex Management Group • Sprout Group Financing: $145.5 million in four rounds and IPO Profitable: No ($29.613 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.fogdog.com Site Launch: November 1998 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 60,000 product SKUs from 600+ manufacturers Accepts Advertising: No • America Online (www.netscape.com) Site Features: General help and customer created content; • America Online (www.compuserve.com) one click ordering/quick buy, online real-time customer • service, and foreign language product information and Della.com (www.della.com) • ordering pages are planned. Excite@Home (www.excite.com) • Back-end Integration: Access to customer account GiftCertificates.com (www.giftcertificates.com) information, order history, order processing, payment • giftpoint.com (www. giftpoint.com) processing, order status, and shipment tracking are • GO Network (www.go.com) integrated into website. • GoTo.com (www.goto.com) • Inktomi Corp. (Inktomi Shopping Engine) MARKETING • mySimon Inc. (www.mysimon.com) Media: Radio and television advertising, consumer • ShopperConnection (www.shopperconnection.com) periodical advertising • WebTV Networks (www.webtv.com) Partnerships: • Women.com Networks (www.women.com) • America Online (proprietary dial-up service) • Yahoo! Inc. (www.yahoo.com) • America Online (www.aol.com) • ZuluSports.com (www.zulusports.com)

70 copyright  2000 by The Intermarket Group The eCommerce Almanac

Affiliates Program: Fogdog Sports Affiliates Program Affiliate Management: Be Free BFAST Number of Affiliates: n/a Payment Processing: CyberSource Commission Rate: 10-20% of sales based on total Other Applications: Personify Essentials, HNC Software quarterly activity Retek e-merchandising, Kana Solution customer support

MANAGEMENT OPERATING BENCHMARKS Tim Harrington, Chief Executive Officer. Previously Total Revenue served as general manager of GolfWeb, director of 1999...... $6.99mn national accounts with Cobra Golf, Inc. and in various 1998...... $0.20mn financial operations management positions with IBM, 1997...... $0.00mn including chief operating officer for the company’s education division. Undergraduate degree from Siena Marketing Expenditures College and M.B.A. from Stanford University. 1999...... $21.45mn Marcy von Lossberg, Chief Financial Officer. Previously 1998...... $ 2.40mn served in various financial positions with Walt Disney 1997...... $ 1.29mn Studios, including senior financial analyst and business planner for Disney’s Buena Vista Home Video division, Technology and Content Expenditures and as a financial analyst with Bankers Trust Company. 1999...... $3.45mn Graduate of Stanford University with dual degrees in 1998...... $1.32mn economics and political science. 1997...... $0.26mn Brett Allsop, President, International. Co-founded Cedro Group, Inc., the predecessor to Fogdog Sports, and COMMENTS previously worked in a corporate management training Fogdog Inc. and its Fogdog Sports online storefront program at West One Bank. B.S. in engineering from offer more than 15,000 products and 60,000 product SKUs Stanford University. from 600+ name brand manufacturers, including Callaway, Robin Smith, Executive Vice President, Retail & Nike, Rawlings, Reebok, Taylor Made, and The North Operations. Previously served as vice president and Face. The company was the first to offer Nike products general manager with Mizuno Sports, Inc., vice president online under an exclusive agreement; the exclusive and general manager of Mizuno’s Donner Mountain agreement expired in March 2000 but the two companies subsidiary, vice president of marketing for Avia footwear are still partners in a long-term distribution agreement. and in various marketing and sales positions with Outdoor Footwear accounted for 21% of total revenue during the Marketing International, Miles Laboratories, Display Mart first quarter of 2000 ending March 31. and Dymo Industries. B.S. in economics from Occidental The company was founded in 1994 and launched its College and M.B.A. from Wharton. first online storefront -- SportSite.com -- in July 1997. Tom Romary, Vice President, Marketing. Previously The company identity was changed to Fogdog in served in various marketing and management positions November 1998. In September 1999, the company with GolfWeb, Creative Wonders Software, General Mills, acquired Sports Universe, Inc. and its sportsuniverse.com and the Dow Co. B.S. degree from Duke University and website for 266,665 shares of Fogdog common stock. M.B.A. from Harvard Graduate School of Business. Total revenue for the first quarter was $4.7 million, Robert Chea, Vice President, Engineering. compared to $0.4 million in the same quarter of 1999, with a loss of $14.75 million. INTERNET INFRASTRUCTURE The Fogdog Sports website is organized into specialty Design Consultants: None shops for soccer, baseball, golf, hockey, snowboarding, Site Maintenance: In-house staff tennis/racquet sports, football, fishing, cycling, walking, Hosting Arrangement: Co-located server(s) fitness/health, fans/memorabilia, outdoor, and group sales. Access Provider: Exodus Communications Each shop organizes products by brand, department -- such Internet Connectivity: Fractional DS-3 line as footwear, apparel and equipment -- and by Fogdog Mirror Locations: One recommendations. Hardware Platform: Sun Microsystems Fulfillment of customer orders is outsourced to Operating System: Solaris 2.6 fulfillment partners -- Keystone Fulfillment and a network Web Server Software: Netscape Enterprise 3.0 of product distributors and manufacturers. The company Web Servers: Six has developed a proprietary system which links directly to Application Servers: One the fulfillment partners. Keystone provides inventory Database Platform: Oracle 8 management, warehousing and shipping services; all Database Servers: One fulfillment partners deliver products in Fogdog Sports Personalization: Proprietary applications packaging, making the network transparent to customers.

Food.com Inc. Food.com Home Page 825 Battery Street San Francisco, CA 94111, U.S.A. Tel. 415-403-5200 Fax 415-981-4801

Unique Visitors (March 2000): 1,815,000 Reach: 2.7% Rank: 325

ORGANIZATION Business Sector: Food services Founded: December 1996 Employees: n/a Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • San Francisco, CA headquarters • Sales offices in New York, Los Angeles, Atlanta, Charlotte, Baltimore, Seattle, Philadelphia, and Washington D.C. Telecenter: None Ownership: Private Trading Symbol: None Major Shareholders: • Accel Partners • Blockbuster • Kraft Foods • McDonald’s Corp. • Novell Ventures • Tribune Ventures Financing: $115 million in three rounds Profitable: No

WEBSITE OVERVIEW Website: www.food.com, www.cybermeals.com, www.cyberslice.com Site Launch: December 1996 (as CyberSlice) Site Type: Business-to-consumer Business Model: Fixed pricing MARKETING Site Size: 16,000 (approx.) restaurants nationwide Media: Radio and television advertising, newspaper Languages: English advertising Accepts Advertising: Yes Partnerships: Site Demographics: 62% female/38% male; 43% college • America Online (proprietary dial-up service) graduate; 65% age 35+; 52% $50K+ average household • America Online (www.aol.com) income • America Online (www.compuserve.com) Site Features: General help and one-click ordering/quick • America Online (www.digitalcities.com) buy • Back-end Integration: Access to customer account AT&T Broadband & Internet Services (AT&T information, order history, and order processing integrated Interactive TV) • into website. Chicago Tribune (www.metromix.com)

72 copyright  2000 by The Intermarket Group The eCommerce Almanac

• Cornerstone Internet Solutions Karen Orton, Vice President of Business Development. (www.foodgalaxy.com) Previously served as vice president of marketing and • CyberGold Inc. (www.cybergold.com) business development for Third Age Media, president of • Miami Herald (www.herald.com) the Internet Strategies Group, general manager of Starpress • MyPoints.com Inc. (www.mypoints.com) Multimedia, and in various positions at Metaphor • MyWay.com (www.myway.com) Computer Systems, Gupta Technologies, Ashton Tate, and • OneClick.com (www.oneclick.com) Software Publishing Corporation. • Orlando Sentinal (www.orlandosentinal.com) Rob Mayfield, Chief Architect • Peapod Inc. (www.peapod.com) INTERNET INFRASTRUCTURE • Philadelphia Inquirer (www.philly.com) Design Consultants: None • Tampa Tribune (www.tampabayonline.com) Site Maintenance: In-house staff • Washington Post Co. (www.washingtonpost.com) Hosting Arrangement: Co-located server(s) • WebTV Networks (WebTV service) Access Provider: AboveNet Communications Affiliates Program: Food.com Affiliate Program Hardware Platform: Intel Pentium No. of Affiliates: n/a Operating System: Solaris Commission Rate: $1.00 for each unique registered Web Server Software: Apache 1.3.0 user, $6.00 for each order and .$0.02 per click through Commerce Platform: Bluestone Software Total-e- Business, proprietary applications MANAGEMENT Database Platform: Oracle Richard Frank, Chairman and Chief Executive Officer. Personalization: Bluestone Software Total-e-Business, Previously served as chairman and CEO of Comcast proprietary applications Content and Communications, chairman of Walt Disney Affiliate Management: LinkShare Television and Telecommunications, and as vice-president Payment Processing: Not used and president of the Paramount Television Group. Other Applications: Microsoft Passport, Apple John Laing, Executive Vice President and Chief WebObjects, Informative Q12 demographic profiling tool, Operating Officer. Previously served as president and WebGain TOPLink CEO of Wayfarer Communications, executive vice president of sales and international marketing at Symantec, OPERATING BENCHMARKS and in various positions at Apple Computer, ECZEL Corp. Registered Members (end of period) and Xerox. 2000(Q1) ...... 1,000,000 Joan Varrone, Vice President, Chief Financial Officer. 1999...... 800,000 Previously served as vice president of finance and CFO at 1998...... 450,000 Catapult Communications, corporate treasurer at Watkins- Johnson Company, and in various management positions COMMENTS at Raychem Corp. and Exxon Enterprises. Food.com was founded in December 1996 as Tatiana Dins, Vice President of Engineering and CIO. CyberSlice, a service that enabled customers to order pizza Previously served as a senior director of computer systems over the Internet from local pizzerias. The company information resources at Sun Microsystems and in various expanded its service to cover restaurants of all types and management positions at Systems Control, GTE Sprint and changed its name to Cybermeals in April 1998. In March Badger/TTI. 1999, the company name was changed again to Food.com. Adam Dubov, Vice President of Content and Executive The company’s website enables customers to browse Producer. Previously served as head of programming and menus and order takeout or delivery meals from more than production at AOL's Entertainment Asylum, as a developer 16,000 restaurants nationwide. The site includes a Dining for Sony Interactive's "Crimes Online," an Internet project Guide with information on an additional 150,000 for Sony Station, and as a film director and screenwriter. restaurants. Expansion plans include the addition of Angela Wilson Gyetvan, Vice President of Marketing. professional and customer restaurant reviews, reservation Previously served as vice president of marketing for Napa services, and delivery of videos and video games through a Valley Kitchens and in various positions at Electronic Arts partnership with Blockbuster. In March 2000, Food.com and Broderbund Software. acquired delivery company Takeout Taxi. The company David B. Seizer, Vice President of Direct Sales. also plans to tailor its site for access by wireless devices, Previously served as a general manager of GTE such as cell phones and personal digital assistants. Communications Corp., regional sales manager at Konica Two of the cornerstones of Food.com’s business Business Machines, chief operating officer of Planet Earth infrastructure are a proprietary voice-automated system Entertainment, and in various positions at Xerox and that turns online orders into voice messages which are IBM/ROLM. automatically phoned to restaurants and its Menucaster

copyright  2000 by The Intermarket Group 73 The eCommerce Almanac software. Menucaster enables a restaurant to receive Internet-generated takeout or delivery orders directly at its FTD.com point-of-sale (POS) terminal. The company charges each 3113 Woodcreek Drive restaurant $79 a month and a percentage of each online Downers Groves, IL 60515, U.S.A. order to participate in its service. Tel. 630-724-6200 Corporate partnerships include several major restaurant chains, including Pizza Hut, KFC and Pizza Inn. In March Fax 630-724-6019 2000, a group of strategic investors that included McDonald’s Corp, Kraft Foods, TV Guide, and Unique Visitors (March 2000): 988,000 Blockbuster invested $80 million in the company in return Reach: 1.5% for a rumored 20% equity stake. Rank: 585 The company has content partnerships with the Washington Post, Chicago Tribune, Los Angeles Times ORGANIZATION and Orlando Sentinel. Marketing partnerships were Business Sector: Floral and Specialty Gifts negotiated in 1998 with Yahoo, Lycos, and Excite but Founded: December 1994 were not renewed as the company redirected its focus to a Employees: 75 more localized approach. A four-year, $20 million Offline Activity partnership with America Online and its local Digital Storefronts: 6,500 owned and operated Cities properties was recently extended to six years by the by FTD florists two companies. Catalogs Mailed: None In May 2000, the company announced plans to launch Facilities: Downers Grove, IL headquarters business-to-business that leverages its existing Telecenter: In-house customer service call center; two relationships with restaurants by creating an online outsourced order-taking call centers purchasing service for the food services industry. Ownership: Public In November 1999, the company launched a shopping Trading Symbol: EFTD (NASDAQ) area offering specialty food items, gifts and other products. Major Shareholders The new “Marketplace” area consists of co-branded • Florists’ Transworld Delivery, Inc.(FTD) (86.5%) websites with more than a dozen partners, including • Public Float (10.5%) wine.com, omahasteaks.com, Proflowers.com, Food & • Buena Vista Internet Group (2%) Wine Magazine, Greatfood.com, GreatCoffee.com, • MSD Capital (1%) EthnicGrocer.com, and Amazon.com. Total Financing: $49 million In July 1999, the company announced a partnership Profitable: No ($23.56 million loss for 9 months ended with Ameranth Technology Systems to extend the 3/31/00) transmission of takeout and delivery orders placed through the Food.com website directly to restaurant kitchens and WEBSITE OVERVIEW point of sale systems. The two companies also plan to Website: www.ftd.com launch service features which enable customers to check Site Launch: 1994 wait times for restaurants, place themselves on wait-lists Site Type: Business-to-consumer before leaving for restaurants, and to make reservations Business Model: Fixed pricing online. Site Size: 400 floral products and 200+ specialty gifts. Languages: English Accepts Advertising: No Site Features: General help, IP telephony Back-end Integration: Access to customer account information, order history, inventory availability, order processing, and payment processing are integrated into website.

MARKETING Media: Television and radio advertising, newspaper advertising, consumer periodical advertising, and direct mail Partnerships: • America Online (www.netscape.com) • ABC Corp. (www.abc.com) • Buena Vista Internet (www.disney.com)

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• Egreetings Networks Inc. (www.egreetings.com) FTD.com Home Page • GiftCertificates.com (www.giftcertificates.com) • GoNetwork/Buena Vista Internet (www.go.com) • InfoSpace.com Inc. (www.infospace.com) • Market Day Corp. (www.marketday.com) • Markets In Motion (airport e-commerce kiosks) • Microsoft Corp. (www.msn.com) • Netcentives Inc. (www.clickrewards.com) • OracleMobile (www.oraclemobile.com) • perksatwork.com (www.perksatwork.com) • SkyMall.com, Inc. (www.skymall.com) • Victoria’s Secret (www.vistoriassecret.com) • WingspanBank (www.wingspan.com) • Yahoo! Inc. (www.yahoo.com) Affiliates Program: FTD.com Affiliates Program Number of Affiliates: n/a Commission Rate: 6-8% of sales based on quarterly volume

MANAGEMENT Michael Soenen, President and CEO Peter Poli, Chief Financial Officer Fred Johnson, Chief Information Officer William VanCleave, Vice President of Marketing Brian Chapman, Vice President of Strategy Paul Qualia, Webmaster

INTERNET INFRASTRUCTURE Design Consultants: Organic, Inc., IBM Global Services Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Intira Internet Connectivity: Multiple T3 lines Total Orders1 Mirror Locations: None 1999...... 856,761 Hardware Platform: Sun Microsystems 1998...... 602,396 Operating System: Solaris 2.7 1997...... 513,198 Web Server Software: Netscape Enterprise Server Commerce Platform: IBM Net.commerce Internet Share of Orders1 2 Database Platform: Oracle 8i 1999...... 53.0% Personalization: Not used 1998...... 33.8% Affiliate Management: LinkShare 1997...... 17.2% Payment Processing: NDC Other Applications: IBM Websphere, Net.Data Marketing Expenditures1 2000 (9 mos.)...... $29.93mn OPERATING BENCHMARKS 1999...... $11.99mn 1 Total Revenue 1998...... $ 5.99mn 2000 (9 mos.)...... $62.6mn 1997...... $ 4.86mn 1999...... $49.6mn 1998...... $30.7mn Technology Expenditures1 1997...... $26.3mn 2000 (9 mos.)...... $5.29mn 1999...... $2.16mn 1 Total Customers (end of period) 1998...... $1.42mn 1999...... 1.80mn 1997...... $1.55mn 1998...... 1.16mn 1997...... n/a 1. Fiscal year ending June 30 2. Company also accepts telephone orders

COMPANY OVERVIEW FTD.com is an online and telephone marketer of Furniture.com Inc. flowers and specialty gifts. The company was founded by 1881 Worcester Road FTD in December 1994 to sell directly to consumers. It Framingham, MA 01701, U.S.A. was spun-out of FTD’s successor, FTDI, in a September Tel. 508-416-6300 1999 public offering. The company’s parent, Florists’ Transworld Delivery, Inc. (FTDI) links together a network Fax: 508-416-6370 of more than 18,000 FTD Florists in the U.S. and Canada and another 52,000 FTD Florists in 140 countries around Unique Visitors (March 2000): 889,000 the world. FTDI is the successor to Florists' Transworld Reach: 1.3% Delivery Association (FTD), a non-profit cooperative Rank: 661 which was founded by a group of ten retail florists 1910. FTD.com sells through its website at www.ftd.com and ORGANIZATION through its 1-800-SEND-FTD toll-free telephone number. Business Sector: Gardening/Home furnishings Flower and plant orders are fulfilled through a network of Furniture/Home furnishings approximately 6,500 FTD florists; specialty gift orders are Founded: June 1998 fulfilled directly by manufacturers or third party Employees: 213 distributors. Offline Activity The company reported $20.2 million in Internet revenue Storefronts: One -- and $26.6 million in total revenue -- for the third quarter Catalogs Mailed: None ending March 31, 2000 with a loss of $8.49 million. The Facilities: Framingham, MA headquarters average order during the third quarter was $59.00. Total Telecenter: In-house call center with 40 representatives orders and Internet orders completed during the quarter Ownership: Private (IPO pending) were 405,364 and 317,747 respectively; total customer Trading Symbol: FURN (NASDAQ) accounts at the end of the period stood at 2.1 million. Major Shareholders: The company transmits flower and plant orders for • CMGI @Ventures (17%) fulfillment through its Mercury Network, which • Brand Equity Ventures (10%) automatically routes each order to a florist based on • Bessemer Venture Partners (9%) location and activity levels. A PC at each florist's shop • No Bricks L.P. (8%) either electronically accepts, rejects or does not respond to • Arkaro Holding B.V (6%) each in-bound order. If no electronic response occurs, a • Munder NetNet Fund (6%) manual call is placed by the company and if the problem • Covestco-AtEura, LLC (5%) cannot be rectified immediately, the system automatically Financing: $84 million in four rounds routes the order to an alternative florist. Profitable: No ($46.460 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.furniture.com Site Launch: June 1998 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 20,000 (approx.) product SKUs from 200+ manufacturers Languages: English Accepts Advertising: No Site Features: General help, contextual help, one-click ordering/quick buy, online real-time customer service Back-end Integration: Access to customer account information, customer order history, inventory availability, order processing, payment processing, order status, and shipment tracking are integrated into website.

MARKETING Media: Radio and television advertising, newspaper advertising, consumer periodical advertising, and direct mail

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Partnerships: Furniture.com Home Page • AltaVista Company (www.altavista.com) • America Online (proprietary dial-up service) • America Online (www.aol.com) • Excite@Home (www.excite.com) • Lycos, Inc. (www.lycos.com) • MSN (www.msn.com) • Yahoo!, Inc. (www.yahoo.com) Affiliate Program: Furniture.com Affiliate Program No. of Affiliates: 11,000 Commission Rate: $4.75 per registered user referral and 5% commission on purchases

MANAGEMENT Andrew L. Brooks, President and Chief Executive Officer. Previously served as chief operating officer of Channel One Network, general manager of BMG Direct Canada, a division of Bertelsmann AG, and as a consultant with McKinsey & Company. B.A. from Haverford College and M.B.A. from Harvard College. Carl Prindle, Senior Vice President of Product Development. Previously served as a consultant with McKinsey & Company, director of marketing for Product Genesis, and manager of industrial design for Design West, Inc., a design consulting firm. B.S. from Stanford University and M.B.A. from Massachusetts Institute of Technology Sloan School of Management. Guangming Lu, Chief Technical Officer. Previously served as vice president of information systems and CTO at uBid and technical development manager for Rand McNally & Company. B.S. from Huazhong University and M.S. from the University of Memphis Michael Sudik, Senior Vice President of Operations. Previously served in various positions at Bertelsmann A.G., including vice president of inventory and production for BMG Direct Marketing, and as vice president of Canadian operations & inventory/ production for BMG Direct. B.A. and M.A. from Duquesne University and M.B.A. from the University of Pittsburgh Rose Mauriello, Vice President of Sales and Customer Care. Previously served as vice president of telesales at GTE Internetworking, in various positions with Sybase, INTERNET INFRASTRUCTURE Inc., including vice president of telesales, and as inside Design Consultants: USWeb/CKS sales manager for Lotus Development Corp. B.A. from Site Maintenance: In-house staff and outside consultants University of Massachusetts and M.B.A. from Babson Hosting Arrangement: Managed hosting College. Internet Connectivity: Three shared DS-3s Kirsten A. von Hassel, Vice President of Marketing. Access Provider: Navisite, Akamai Technologies Previously responsible for new subscriber marketing Mirror Locations: None activities across all media at The New York Times and as Hardware Platform: Intel Pentium head of member acquisition efforts at BMG Direct, a Operating System: Microsoft Windows NT division of Bertelsmann A.G. B.A. in economics from Web Server Software: Microsoft IIS 4.0 Columbia University and M.B.A. in Marketing from Commerce Platform: Microsoft Site Server Commerce Wharton. Edition, proprietary applications

Database Platform: Microsoft SQL Server Personalization: Net Perceptions Group Lens Gap Inc. Direct Recommendation Engine; proprietary application The Gap, Inc. Affiliate Management: Be Free BFAST One Harrison Street Payment Processing: Proprietary application, Microsoft San Francisco, CA 94105, U.S.A. Passport Tel. 415-952-4400 OPERATING BENCHMARKS Total Revenue Unique Visitors (March 2000): 1,251,000 1999...... $10.904mn Reach: 1.9% 1998...... $ 3.691mn Rank: 523 1997...... $ 1.728mn ORGANIZATION Marketing Expenditures Business Sector: Clothing 1999...... $33.949mn Founded: 1969 1998...... $ 1.426mn Employees: 140,000 total 1997...... $ 0.269mn Offline Activity Storefronts: 1,781 U.S. Gap stores and 400 Technology Expenditures international Gap stores; 3,058 stores worldwide 1999...... $6.685mn Catalogs Mailed: None 1998...... $1.081mn Facilities: 1997...... $0.00 • San Bruno, CA headquarters • San Francisco, CA corporate offices Customers • New York, NY corporate offices 1999...... 260,000 • Rocklin, CA data center and call center 1998...... n/a • Grove City, OH Gap Online call center 1997...... 0 • Grove City, OH Gap Online distribution center • Fresno, CA distribution center • Ventura, CA distribution center • Baltimore, MD distribution center • Gallatin, TN distribution center • Brampton, ON, Canada distribution center • Roosendaal, Netherlands distribution center • Essex, U.K. distribution center • Funabashi City, Japan distribution center Telecenter: Two in-house call centers Ownership: Public Trading Symbol: GPS (NYSE) Major Shareholders: n/a Shareholder Equity: $2.233 billion Profitable: Yes ($824.5 million profit for FY ’00)

WEBSITE OVERVIEW Website: www.gap.com, www.babygap.com, www.gapkids.com, www.bananarepublic.com Site Launch: December 1996; November 1997 (commerce- enabled version) Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 5,000 (approx.) products SKUs Languages: English Accepts Advertising: No Site Features: General help, contextual help, one-click ordering/quick buy Back-end Integration: Access to customer account information is integrated into website

78 copyright  2000 by The Intermarket Group The eCommerce Almanac

Gap Online Home Page Mirror Locations: None Hardware Platform: Sun Microsystems, Intergraph Operating System: Windows NT 4 Web Server Software: Microsoft IIS 4.0 Commerce Platform: Microsoft Site Server Commerce Edition Web Servers: Multiple Sun Ultra Enterprise servers Database Platform: Informix OnLine Dynamic Server Database Servers: One Sun Ultra Enterprise server Personalization: Not used Affiliate Management: Not used Other Applications: Personify Essentials, RedCart Universal Shopping Cart, Cisco Local Director, CyberCash InstaBuy, Kana Solution customer support

OPERATING BENCHMARKS Total Revenue1 2 1999...... $11.64bn 1998...... $ 9.05bn 1997...... $ 6.51bn

Advertising Expenditures1 2 1999...... $529mn 1998...... $419mn 1997...... $175mn

MARKETING 1. Fiscal year ending January 30 Media: Television advertising, newspaper advertising, 2. Based on company-wide figures because Gap does not break out consumer periodical advertising data for Gap Inc. Direct. Partnerships: • America Online (proprietary dial-up service) COMMENTS The Gap is a leading U.S. retailer of casual apparel. It’s • America Online (www.aol.com) Internet operations are managed by Gap Online, which is a • America Online (www.netscape.com) division within the company’s Gap Inc. Direct unit. The • America Online (www.compuserve.com) • online business is based in San Francisco and New York Della.com (www.della.com) and shares call-centers in Grove City, Ohio and Rocklin, • EarthLink Inc. (www.wizshop.com) California with its hardcopy catalog counterpart. Orders • GiftCertificates.com (www.giftcertificates.com) for Gap Online and the company’s mail order operations • iVillage Inc. (www.ivillage.com) are fulfilled from a Grove City, Ohio distribution center. • Microsoft Corp. (www.msn.com) The Gap online storefront was launched in 1997, • NBC Internet (www.snap.com) followed by online stores for GapKids and babyGap in • Netcentives Inc. (www.clickrewards.com) 1998 and Banana Republic Online in 1999. An online • Prodigy Services Corp. (shopnet.prodigy.com) storefront for the company’s Old Navy brand was • Yahoo! Inc. (www.yahoo.com) launched in the second quarter of 2000. The company’s Affiliates Program: None various online storefronts contributed approximately $25 million to top-line revenues in 1998 and an estimated $50- MANAGEMENT $100 million in 1999, according to Goldman Sachs. Ron Beegle, Executive Vice President - Gap Inc. Direct The company views its online storefronts as an Mitch Rhodes, Vice President, Marketing - Gap Inc. extension of its bricks-and-mortar stores. Its strategy is to Direct re-create the experience of its physical stores in the online storefronts, enabling customers to easily switch between INTERNET INFRASTRUCTURE them whenever convenient; for example, customers Design Consultants: Fort Point Partners; Evolve Creative purchasing items online can either return them using a Design; Dataway Design prepaid return shipping label packed with the order, or Site Maintenance: In-house staff they can be returned to any of the company’s physical Hosting Arrangement: Co-located server(s) locations. Access Provider: Pilot Network Services, Inc. copyright  2000 by The Intermarket Group 79 The eCommerce Almanac

Garden.com, Inc. Garden.com Online Home Page 3301 Steck Avenue Austin, TX 78757, U.S.A. Tel. 512-532-4000 Fax 512-532-4100

Unique Visitors (March 2000): 1,362,000 Reach: 2.0% Rank: 469

ORGANIZATION Business Sector: Home and Garden products Founded: December 1995 Employees: 290 Offline Activity Storefronts: None Catalogs Mailed: 3.5 million Facilities: • Austin, TX, headquarters • San Francisco, CA, Fresh Stems, Cut Flowers • Des Moines, IA publishing office Telecenter: In-house call center with 25 (approx.) representatives Ownership: Public Trading Symbol: GDEN (NASDAQ) Major Shareholders: • Cliff Sharples, President and CEO • James O’Neill, Chief Operating Officer • Lisa Sharples, Chief Marketing Officer • Andy Martin, Chief Science Officer • The E.W. Scripps Company • Global Retail Partners, L.P. • Austin Ventures • Pequot Capital Management, Inc. • Oak Investment Partners • Phillips-Smith Specialty Group, III, L.P. • Patricof & Co. Ventures • Attractor LLC Financing: $100 million in five rounds and IPO Profitable: No

WEBSITE OVERVIEW Website: www.garden.com, www.virtualgarden.com Site Launch: March 20, 1996 Site Type: Business-to-consumer, business-to-business Site Features: General help, contextual help, online real- Business Model: Fixed pricing time customer service, real-time customer-to-customer Site Size: 20,000 (approx.) product SKUs chat, customer created content Languages: English Back-end Integration: Access to customer account Accepts Advertising: Yes information, order history, inventory availability, order Site Demographics: 62% female/38% male; 85% college processing and payment processing, order status, and educated; 78% married; 78% age 35+; 88% $35K+ shipment tracking are integrated into website. average household income and 45% $75K+ average household income

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MARKETING INTERNET INFRASTRUCTURE Media: Television and radio advertising, newspaper Design Consultants: None advertising, business and consumer periodical advertising, Site Maintenance: In-house staff direct mail Hosting Arrangement: Co-located server(s) Major Partnerships: Access Provider: Jump Point Communications, Inc. • Excite@Home (www.home.com) Internet Connectivity: One DS-3 line • iVillage Inc. (www.ivillage.com) Mirror Locations: Two • Microsoft Corp. (www.msn.com) Hardware Platform: Sun Microsystems • Netcentives Inc. (www.clickrewards.com) Operating System: Solaris 7 • ShopperConnection (www.shopperconnection.com) Web Server Software: Apache • ThirdAge Media Inc. (www.thirdage.com) Commerce Platform: Proprietary application Web Servers: Multiple Sun e450s servers • HGTV (cable TV channel) Database Platform: Oracle 8i • Horticulture Magazine (print publication) Database Servers: One Sun e4500 server • PRIMEDIA (consumer print magazine publisher) Personalization: Proprietary applications • Southern Living (print publication) Affiliate Management: BeFree BFAST Affiliates Program: Garden.com Affiliate Program Payment Processing: Signio Number of Affiliates: 15,300 Other Applications: Sage proprietary application server, Commission Rate: 5-10% RedCart Universal Shopping Cart

MANAGEMENT OPERATING BENCHMARKS Cliff Sharples, President and Chief Executive Officer. Total Revenue1 Previously served as director of business development for 2000 (9 mos.)...... $8.2mn pcOrder.com, Inc., a spin-off of Trilogy Development 1999...... $5.4mn Group, and in various information technology and 1998...... $1.3mn management positions with Enterprise Integration 1997...... $ 316K Technologies (EIT), Coopers & Lybrand Consulting Technology Advisory Services, and Practical Productions, Sales to Repeat Customers1 Inc. B.S. in Information Systems from Carnegie-Mellon 2000 (Q3) ...... 42% University and Masters in Management from Kellogg 1999 (Q3) ...... 38% Management School of Business from Northwestern 1998...... n/a University. James O’Neill, Chief Operating Officer. Previously Marketing Expenditures1 served as an internal consultant for W.W. Grainger, Inc.’s 2000 (9 mos.)...... $16.0mn electronic commerce and Internet marketing initiatives and 1999...... $13.3mn as chief operating officer of Central Atlantic Packaging. 1998...... $ 2.4mn B.A. in economics from University of Wisconsin, Madison 1997...... $ 0.9mn and Masters of Management from Northwestern University’s Kellogg School of Business. Development Expenditures1 Lisa Sharples, Chief Marketing Officer. Previously 2000 (9 mos.)...... $4.8mn responsible for new products promotion at Silicon 1999...... $3.2mn Graphics, Sun Microsystems, Inc., and Standish, Ayer & 1998...... $1.2mn Wood, Inc, and served as director of marketing for 1997...... $0.9mn pcOrder.com, Inc. B.S. in biochemistry from Bowdoin College and Masters of Management Northwestern Registered Users (end of period)1 University’s Kellogg School of Business. 2000 (Q3) ...... 1,070,000 Andrew Martin, Chief Science Officer. Previously 1999...... 650,000 employed by Trilogy Development Corp. and led 1998...... 300,000 development of DCE based Client Server Solution for the company’s Configuration and Selling Chain products and 1. Fiscal year ending June 30 the Multi Internet Server software used by pcOrder. Prior to that, served as chief programmer for the System Object COMMENTS Model (SOM) and Distributed SOM (DSOM) at IBM Garden.com operates online destination sites for Corp. Ph.D. in Computer Science from The University of individuals interested in all aspects of gardening. The sites Leeds. -- garden.com, virtualgarden.com, and hortmag.com -- provide a combination of original content, community

copyright  2000 by The Intermarket Group 81 The eCommerce Almanac features, and an online storefront offering plants, bulbs, seeds, and a wide variety of gardening tools and related Gateway, Inc. items. A print magazine, Garden Escape, was launched in 4545 Towne Centre Court March 1999. The company was originally founded as San Diego, CA 92121, USA Garden Escape and changed its name Garden.com in Tel. 858-799-3401 February 1999. At the end of the fiscal third quarter ending March 31, Fax 858-799-3402 2000, the company had more than 183,000 customers and more than 1.07 million registered users. Revenues from Unique Visitors (March 2000): 2,160,000 product sales were $2.6 million for the quarter -- repeat Reach: 3.2% customers accounted for 42% of orders -- and total Rank: 252 revenues were 3.16 million with a loss of $11.44 million. The Garden.com online storefront is supported on the ORGANIZATION back-end by a proprietary virtual supply chain system -- Business Sector: Computer hardware TRELLIS -- that integrates seamlessly with the company’s Founded: 1986 network of more than 85 suppliers to create a "virtual Employees: 18,700 total warehouse." The TRELLIS system provides inventory Offline Activity availability information, submits orders to the appropriate Storefronts: 260 U.S.; 58 international suppliers for drop-shipment, and enables customers to Catalogs Mailed: 10,000+ check order status. The system is also integrated into Facilities: FedEx's advanced automation products, providing both the • San Diego, CA headquarters company and customers with real-time shipment tracking • North Sioux City, SD production facility, warehouse, information across the entire supplier network. and customer sales and support center • North Sioux City, SD manufacturing and warehouse facility • Vermillion, SD warehouse and customer service facility • Sioux Falls, SD remanufacturing facility • Lake Forest, corporate offices • Hampton, VA manufacturing and customer support and sales facility • Salt Lake City, UT manufacturing and customer support and sales facility • Lake Forest, CA manufacturing and customer support and sales facility • Kansas City, MO customer sales and support center • Rio Rancho, NM customer support center • Colorado Springs, CO customer support center • Lakewood, CO information technology and support center • Dublin, Ireland European headquarters, production facility, and customer sales and support center • Malacca, Malaysia manufacturing facility • Kuala Lumpur, Malaysia call center • Sydney, Australia distribution facility • Yokohama, Japan customer sales and support center • Tokyo, Japan customer sales and support center • Singapore distribution facility • Hong Kong distribution facility • New Zealand manufacturing, sales, customer support facility Telecenter: 11 in-house call centers with 3,900+ sales representatives and 6,600+ customer and technical support representatives

82 copyright  2000 by The Intermarket Group The eCommerce Almanac

Ownership: Public Gateway Home Page Trading Symbol: GTW (NYSE) Shareholder Equity: $17.740 billion Profitable: Yes ($427.9 million company-wide profit for FY ’99)

WEBSITE OVERVIEW Website: www.gateway.com, www.gateway2000.com, www.gatewayatwork.com Site Launch: April 1996 (commerce-enabled version) Site Type: Business-to-consumer, Business-to-business Business Model: Fixed pricing Site Size: Six lines of Gateway 2000 PCs, notebooks, servers, and workstations and 30,000+ peripherals and accessories Languages: English with international sites in German, French, Japanese, Swedish, and Dutch Accepts Advertising: No Site Features: General help, threaded discussion groups, foreign language product information and order pages Back-end Integration: Access to order status and shipment tracking are integrated into website. OPERATING BENCHMARKS Total Revenue1 MARKETING 1999...... $8.6bn Media: Television and radio advertising, newspaper 1998...... $7.5bn advertising, business and consumer periodical advertising, 1997...... $6.3bn direct mail Partnerships: 1. Based on sales from all sources because company does not break out data for web activity. • CNET, Inc. (CNET Premier Merchant Program) • quepasa.com (www.quepasa.com) COMMENTS • Virtual Emporium (www.virtualemporium.com) Gateway has been selling PCs through its website since Affiliates Program: None 1996. Although the company does not disclose web sales figures, analysts estimate that the site accounted for almost MANAGEMENT $300 million of the company’s $8.6 billion total 1999 Peter Ashkin, Chief Technology Officer sales. In addition to using the Internet as a sales channel, James Pollard, Senior Vice President and Chief the company is embracing it to offer new services to Information Officer customers and generate additional revenue streams. Long Chuck Geiger, Vice President of Electronic Commerce term, the company hopes to sell help desk, remote diagnostics and asset management services, such as INTERNET INFRASTRUCTURE tracking installed systems and software, installing Design Consultants: None upgrades. Site Maintenance: In-house staff Gateway announced an agreement with America Online Hosting Arrangement: On-site server(s) in October 1999 in which the two companies would offer a Access Provider: UUNET/MCI Worldcom, Genuity Inc. joint Internet service. As part of the agreement, AOL Mirror Locations: None agreed to invest $800 million in the company over a three- Hardware Platform: Intel Pentium year period. At the end of 1999, the Gateway.net ISP Operating System: Microsoft Windows NT service boasted more than one million subscribers and an Web Server Software: Microsoft IIS 4.0 additional 300,000 were added during the first quarter of Commerce Platform: Microsoft Site Server Commerce 2000. Edition The company acquired a 7.6% stake in quepasa.com, a Database Platform: Microsoft SQL Server Spanish language content and community site, for $10 Personalization: Note used million in March 2000. At the time of the investment, Affiliate Management: Not used Gateway indicated plans to utilize quepasa.com's position Other Applications: Calico eSales remote configuration in the U.S. Hispanic community as part of its Spanish- software, Xchange eCRM, Kana Solution customer language initiative. support, iBuyLine TestDriver technology

In February 1999, the company acquired a minority stake in the e-commerce operations of NECX Direct and Grainger.com jointly launched "SpotShop.com," a site that offered W.W. Grainger, Inc. Gateway branded products as well as complimentary 455 Knightsbridge Parkway peripherals and software from leading manufacturers. In Lincolnshire, IL 60069, U.S.A. July 1999, SpotShop.com was integrated into the Gateway website where it is now called the "Accessory Store." Tel. 847-982-9000

Unique Visitors (March 2000): 75,000 Reach: 0.1% Rank: 9,365

ORGANIZATION Business Sector: MRO supplies Founded: 1927 Employees: 15,299 total (web staff: n/a) Offline Activity Storefronts: 348 U.S. Catalogs Mailed: 2mn (print), 150,000 (CD-ROM) Facilities: • Lincolnshire, IL Grainger.com headquarters • Niles, IL national distribution center • Kansas City, MO regional distribution center • Greenville, SC regional distribution center • Six zone distribution centers across U.S. Telecenter: n/a Ownership: Public Trading Symbol: GWW (NYSE) Major Shareholders: n/a Shareholder Equity: $1.332 billion Profitable: Yes ($180.731 million profit from all operations in FY ’99)

WEBSITE OVERVIEW Website: www.grainger.com, www.orderzone.com, www.findmro.com, www.totalmro.com Site Launch: June 1995 Site Type: Business-to-business Business Model: Fixed pricing and negotiated/auction pricing Site Size: 220,000+ products in 19 categories Languages: English Accepts Advertising: No Site Features: General help, contextual help, one-click ordering/quick buy, online real-time customer service Back-end Integration: Access to inventory availability and order processing are integrated into website.

MARKETING Media: Radio advertising, consumer and business periodical advertising, direct mail Partnerships: • Ariba, Inc. (Ariba.com Network) • Commerce One, Inc. (BuySite software) • Commerce One, Inc. (MarketSite.trading portal)

84 copyright  2000 by The Intermarket Group The eCommerce Almanac

• Intelisys Electronic Commerce, LLC (i-Procurement Grainger Home Page software) • PSDI (www.mro.com) • PSDI (MAXIMO software) • SAP AG (B2B Procurement software) Affiliates Program: None

MANAGEMENT Elizabeth Olig, President of New Ventures, W.W. Grainger Donald Bielinski, Group President-Emerging Businesses James Ryan, President, Grainger.com Jody Yeganeh, Marketing Director, Grainger.com Daniel Hamburger, President, OrderZone.com Robert Wasserman, Vice President, Grainger Internet Commerce and head Grainger Auctions Tom Condon, Vice President of eBusiness Sales

INTERNET INFRASTRUCTURE Design Consultants: Xpedior, MarchFirst, Broadvision. Site Maintenance: In-house staff Hosting Arrangement: Managed hosting by Digex Access Provider: Inter Access Company, IBM Corp. Mirror Locations: None Hardware Platform: Sun Microsystems Operating System: Solaris UNIX Web Server Software: Netscape Enterprise Server 2.01 Commerce Platform: Broadvision Commerce; proprietary applications Web Servers: One Sun Netra server Database Platform: Oracle Database Servers: One Sun Netra server Personalization: Broadvision One-to-One Affiliate Management: Not used Payment Processing: Not used; orders processed using pre-existing Grainger account number Other Applications: OnDisplay CenterStage, FairMarket AuctionPlace, BEA WebLogic Commerce Server, 1995 and in January 1999 separated its Internet businesses webMethods B2Bi, Requisite Technology BugsEye into three distinct units: Grainger.com, OrderZone.com, and Grainger Auctions. OPERATING BENCHMARKS Grainger.com is the company’s flagship site and Total Revenue enables customers to search its catalog of more than 1999...... $4.534bn 220,000 products and place their orders online. 1998...... $4.341bn OrderZone.com was launched in May 1999 as a multi- 1997...... $4.137bn distributor site that enables users to purchase products from a number of different suppliers through a single order Online Sales and receive one invoice. Eight suppliers, offering more 1999...... $102mn than 420,000 products SKUs, currently participate in 1998...... $ 13mn OrderZone.com. 1997...... n/a Grainger Auctions was launched in November 1999 and serves as an outlet to move discontinued inventory for COMMENTS the company’s various operating units. The company is W.W. Grainger is a leading distributor of industrial planning to open the site to other suppliers. MRO (maintenance, repairs, and operations) supplies, FindMRO.com, launched in November 1999, is serving more than 1.3 million customers in North America. operated separately as an Internet-based sourcing center The company launched its original Grainger.com site in for indirect material spot buys. The service is built around

copyright  2000 by The Intermarket Group 85 The eCommerce Almanac a database of more than 12,000 suppliers and five million products. HomeGrocer.com, Inc. In March 2000, TotalMRO.com was launched as a one- 10230 N.E. Points Drive, stop, Internet-based MRO supplies solution that provides Kirkland, Washington 98033, U.S.A. customers real-time access to product information, contract Tel. 425-201-7500 pricing, and availability for several million products and services from major MRO distributors. Customers access Fax 425-201-7575 TotalMRO.com through e-commerce platforms such as market exchanges and portals. Unique Visitors (March 2000): 120,000 The annualized run rate for Grainger.com in 2000, Reach: 0.2% based on year-end 1999 activity, is estimated by the Rank: 6,117 company at more than $200 million. Revenue at the company’s other “Digital Businesses” -- OrderZone.com ORGANIZATION and FindMRO.com -- totaled $2.98 million from product Business Sector: Groceries sales and service fees during 1999. Expenditures at Founded: September 1997 Grainger.com were $20.90 million in 1999 and $6.70 Employees: 1,060 (128 IT staff) (1/1/00) million in 1998. Expenditures at OrderZone.com and Offline Activity FindMRO.com were $23.50 million in 1999 and $8.60 Storefronts: None million in 1998. Operating losses for the Digital Catalogs Mailed: None Businesses were $20.56 million in 1999 and $8.09 million Facilities: in 1998; the company did not breakout results for • Kirkland, WA headquarters Grainger.com. • Renton, WA customer fulfillment center For the first quarter ending March 31, 2000, the • Tualatin, OR customer fulfillment center company reported total sales of $1.2 billion and sales of • Fullerton, CA customer fulfillment center $62 million from its suite of five business-to-business • Carson, CA customer fulfillment center Internet sites. The 2000 run rate for online sales was • Irvine, CA customer fulfillment center approximately $300 million, based on end-of-quarter • Azusa, CA customer fulfillment center levels. The company also reports that it invested an • Dallas, TX customer fulfillment center* additional $25 million in its Internet sites during the first • San Diego, CA customer fulfillment center* quarter. • Stamford, CT customer fulfillment center* • Atlanta, GA customer fulfillment center* • Washington, D.C. customer fulfillment center* • Chicago, IL customer fulfillment center* • San Francisco, CA customer fulfillment center* * Facility leased but not in operation as of 5/1/00 Telecenter: n/a Ownership: Public Trading Symbol: HOMG (NASDAQ) Major Shareholders • Amazon.com Inc. (22%) • Kleiner Perkins Caufield & Byers (11%) • Hummer Winblad Venture Partners (11%) • Barksdale Group (5%) • J. Terrence Drayton, President (5%) • Mary Alice Taylor, CEO (5%) Financing: $498.2 million in four rounds and IPO Profitable: No ($83.993 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.homegrocer.com Site Launch: June 1998 Site Type: Business-to-consumer Site Version: 2.0 Business Model: Fixed pricing Site Size: 15,000 products (approx.)

86 copyright  2000 by The Intermarket Group The eCommerce Almanac

Languages: English HomeGrocer.com Home Page Accepts Advertising: No Site Features: General help Back-end Integration: Access to customer account information, inventory availability, order processing and payment processing are integrated into website.

MARKETING Media: Television and radio advertising, direct mail Partnerships: • Amazon.com Inc. (www.amazon.com) • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.netscape.com) • America Online (www.compuserve.com) Affiliate Program: None

MANAGEMENT Mary Alice Taylor, Chairman and Chief Executive Officer. Previously served as executive vice president of BEST Consulting and Andersen Consulting. Also served Global Operations and Technology for Citigroup, in as a software engineer with NASA's Johnson Space various positions at Federal Express, including senior vice Center. B.S. in applied mathematics/operations research president of Ground Operations, and as financial planning from the University of Tulsa manager of U.S. Operations with Northern Telecom, Corwin Karaffa, Senior Vice President of Operations. controller at Cook Investment Properties, and senior Previously served as vice president of distribution of accountant, oil and gas explorations at Shell Oil. B.A. in Certified Grocers of California and in various management finance from Mississippi State University. positions with Procter & Gamble, including manager of J. Terrence Drayton, President. Previously served as distribution development. B.S. in political science from president of Terran Ventures, Inc., a venture capital and the United States Naval Academy. consulting company, and as a co-founder and senior Jonathan Landers, Senior Vice President of Marketing manager of Aquaterra, a Canadian bottled water company, and Sales. Previously served as vice president of and Laurentian Spring Valley Water. B.Comm. from the marketing for Norm Thompson Outfitters, vice president University of Calgary and M.B.A. from York University. of corporate marketing and new business development for Daniel Lee, Chief Financial Officer. Previously served as the National Geographic Society, interim vice president of senior vice president of finance and development and CFO corporate marketing for Russell Athletic, president and for Mirage Resorts, director of equity research for CS First CEO of Neuhaus (U.S.A.), a Belgian chocolate retailer. Boston, and in various positions with the investment bank and in various positions at subsidiaries of Sara Lee. B.A. Drexel Burnham Lambert. B.S. and M.B.A. from Cornell in government from Bowdoin College and M.B.A. from University Columbia University. Rex Carter, Vice President of Systems Development and Technology. Previously served as senior vice president INTERNET INFRASTRUCTURE and chief information officer for Carlson Companies, Design Consultants: None senior manager with EDS, vice president of Site Maintenance: In-house staff telecommunications and technology centers for the Hosting Arrangement: Co-located server(s) subsidiary companies of Texas Air Corp., and as a Internet Connectivity: n/a consultant with Booz, Allen & Hamilton. B.S. in Access Provider: InterNAP Network Services engineering from Purdue University. Mirror Locations: None Ken Deering, Vice President of Storefront. Previously Hardware Platform: Sun Microsystems served as an independent management consultant through Operating System: Solaris UNIX Heldeer Ventures, vice president of sales and marketing Web Server Software: Stronghold/Apache for Offshore Systems, and in various marketing and Commerce Platform: Proprietary Java applications operations positions at Glenayre Technologies. Sales and Web Servers: Multiple Sun Enterprise 3500 and 4500 marketing management diploma from the University of servers British Columbia. Database Platform: Oracle 8i Robert Duffy, Chief Information Officer. Previously Database Servers: See “Web Servers” above served as a management consultant at Analytical Software,

Personalization: Net Perceptions Group Lens Recommendation Engine HomePoint Corp. Affiliate Management: Not used 531 South Main Street, Suite 200 Payment Processing: Proprietary applications Greenville, SC 29601, U.S.A. Other Applications: Vignette content management Tel. 864-678-1500 software; E.piphany E.4; F5 Networks BIG-IP load balancing software; SAS Institute visitor analysis software; Fax 864-678-1600 Mercury Interactive WinRunner, LoadRunner and Test Director. Unique Visitors (March 2000): n/a Reach: n/a OPERATING BENCHMARKS Rank: n/a Total Revenue 1999...... $21.65mn ORGANIZATION 1998...... $ 1.09mn Business Sector: Gardening/Home furnishings 1997...... $ 0.0mn Founded: August 1998 Employees: 165 Marketing Expenditures Offline Activity 1999...... $7.7mn Storefronts: None 1998...... $1.0mn Catalogs Mailed: None 1997...... $0.1mn Facilities: Greenville, SC headquarters Telecenter: In-house call center with 40 representatives Total Customers (end of period) Ownership: Private 1999...... 55,000 Trading Symbol: none Major Shareholders COMMENTS • Thomas Lee.Putnam Internet Partners HomeGrocer.com is the largest online grocer -- based • Catterton Partners on sales -- offering a selection of fresh fruit and • GE Equity vegetables, dairy products, baked goods, meat and fish, • Granite Private Equity, II, LLC. non-perishable items and household products, health and Financing: $75 million in two rounds beauty products, wine and beer, fresh flowers, pet Profitable: No products, home office supplies, postage stamps, seasonal items and top-selling books, video games and movies. WEBSITE OVERVIEW Customers order through the company's website at any Website: www.homepoint.com time up to 11:00 p.m. and then select a 90-minute window Site Launch: December 1998 for next day delivery. First-time orders and all orders over Site Version: 2.0 $75.00 are delivered free. The company has served the Site Type: Business-to-business Seattle area since June 1998, Portland, OR (May ‘99), Business Model: Fixed pricing Orange County, CA (September ‘99) and Los Angeles, CA Site Size: 60,000 SKUs (approx.) (January ‘00). Languages: English During 1999, the company made deliveries to more Accepts Advertising: No than 55,000 different households. Approximately 64% of Site Features: General help, one-click ordering/quick buy, orders in 1999 came from repeat customers and and customer created content; contextual help, online real- approximately 36,000 customers placed at least two orders time customer service, threaded discussions, and real-time during the twelve-month period. Total revenue in the first customer-to-customer chat features are planned. quarter ending April 1, 2000 increased to $21.2 million Back-end Integration: Access to order history, inventory with a loss of $43.47 million. Repeat customers accounted availability, order processing and order status are for 77% of orders during the quarter. integrated into website; web access to customer account The company plans to expand into eight to ten new information, payment processing, and shipment tracking metro areas -- down from 20 forecast during 1999 -- and are planned. add approximately two million square feet of warehouse space, more than 1,000 new delivery trucks, and up to MARKETING 7,000 new employees during 2000. HomeGrocer.com Media: Radio advertising, newspaper advertising, and estimates the cost of entry into each new market at $9 to business periodical advertising $15 million, approximately $4-7 million to outfit the Partnerships: None customer fulfillment center and $5-8 million for brand Affiliates Program: None development, marketing and other promotional activities.

88 copyright  2000 by The Intermarket Group The eCommerce Almanac

MANAGEMENT HomePoint Home Page Michael R. West, President and Chief Executive Officer. Previously served as vice president of business development and strategic planning for ZCI Integrated Solutions. B.S. in Marketing Management from University of Tennessee. Daniel H. Christie, Chief Financial Officer. Previously served as CFO for Datastream Systems and in various positions at Digital Equipment Corp. B.A. in Economics from Colgate University and M.B.A. from Cornell University. Barbara E. Jessen-White, Chief Information Officer. Previously served as vice president of e-business solutions for ECWerks, Inc. and initiated and led the development of electronic commerce tools for Tech Data Corp. B.S. in Finance and M.B.A. from the University of South Florida. Cody S. McGarraugh, Senior Vice President of Business Development. Previously served as vice president of equity research for Scott & Stringfellow, Inc., a leading investment bank for the home furnishings and consumer products industries and as a vice president of equity research at Arneson, Kerchiville & Associates in San Antonio, TX. B.S. in Economics from Texas Christian University. Melissa G. Selig, Controller, CPA. Previously served as controller for Claremont Technology Group and as a senior, staff, and assistant accountant for KPMG Peat Marwick. B.S. in Mathematics and M.S. in Management from North Carolina State University; Masters of Accounting from University of North Carolina at Chapel Hill.

INTERNET INFRASTRUCTURE Design Consultants: In-house, Interworld, and Ericcson Site Maintenance: In-house staff Hosting Arrangement: Co-located servers Access Provider: Global Crossing GlobalCenter what it calls the HomePoint Advantage Network. This Internet Connectivity: 100 Mbps extranet enables member companies to expand their Mirror Locations: None product offerings and compress distribution cycles so that Hardware Platform: Sun Microsystems ultimately consumers have greater access to what they Operating System: Solaris 2.6 want, and will receive it sooner than expected. With Web Server Software: Netscape, Apache hundreds of retailers and manufacturers already a part of Commerce Platform: Interworld Commerce Exchange the HomePoint Advantage Network Web Servers: Two Application Servers: Two Database Platform: Oracle Database Servers: Two Personalization: Under consideration Affiliate Management: Not used Payment Processing: n/a Other Applications: Adobe Photoshop, Macromedia Fireworks

COMMENTS HomePoint Corp. employs the Internet to connect home furnishings manufacturers, suppliers, and retailers into

IMX Exchange IMX Exchange Home Page 2305 Camino Ramon, Suite 200 San Ramon, CA 94583, U.S.A. Tel. (925) 983-1707 Fax (925) 983-1705

Unique Visitors (March 2000): n/a Reach: n/a Rank: n/a

ORGANIZATION Sector: Financial services/Banking/Brokerage Founded: 1995 Employees: 128 (15 Web Staff) Offline Activity Storefronts: None Catalogs Mailed: None Facilities: San Ramon, CA headquarters Telecenter: In-house call center with 40 customer service representatives Ownership: Private Trading Symbol: None Major Shareholders • Hummer Winblad Ventures (28.7%) • Mohr Davidow Ventures (13.3%) • Lehman Brothers (11.0%) • Technology Crossover Ventures (10.5%) Affiliates Program: Planned • Citicorp, Inc. (5.5%) Number of affiliates: None Financing: $55.5 million Commission Rate: None Profitable: No ($13.224 million loss for FY ’99) MANAGEMENT WEBSITE OVERVIEW Richard Wilkes, Chief Executive Officer. Previously Website: www.imxexchange.com served as CEO of four mortgage banking companies Site Launch: 1997 owned and operated by MacAndrews & Forbes Holdings, Site Version: 4.0 Inc., including First Nationwide Mortgage and First Site Type: Business-to-business Gibraltar Mortgage, and as chairman and CEO of North Business Model: Auction/Negotiated Pricing American Mortgage Company. B.S. in Economics and Languages: English Finance from the University of Houston. Accepts Advertising: No Jeff Pullen, Chief Financial Officer. Previously served as Site Features: General help, contextual help; threaded vice president of finance at Baker Petrolite Corp. and as an discussions and customer created content are planned auditor, consultant and partner in the Financial Advisory Back-end Integration: Access to customer account Services unit at PricewaterhouseCoopers. B.S. in Business information, order history, inventory availability, Administration/Accounting from the University of transaction processing, and transaction status are integrated Nebraska. into website. Erin Esparza, Senior Vice President of Marketing. Previously associated with Intel's corporate business MARKETING development effort where she was responsible for making Media: Newspaper advertising, business periodicals, and venture capital investments in support of the company's direct mail; broadcast radio and broadcast television strategic objectives, including Intel's investment in IMX advertising under consideration Exchange. Also served in various management positions in Partnerships: • product marketing for Intel and as a consultant with the LoanUpdate (www.loanupdate.com) Boston Consulting Group. B.A. in Economics from • MyersInternet (www.meyers.com) Harvard University.

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Robbie Mihalyi, Senior Vice President of Engineering The company operates an online bid/ask exchange -- and Technology. Previously served as director of the SQL similar to the NASDAQ stock market -- between more server development division of Sybase. Attended the than 1,300 mortgage brokers across 42 states and a Human and Real Sciences University in Europe and network of national, regional, and local mortgage lenders. currently working towards M.B.A. The exchange enables participating lenders to see and bid Kevin Gillespie, Senior Vice President, Sales. Previously on individual loans in real-time as they’re posted by served as a retail loan manager of First Gibraltar member brokers. More than $1.8 billion in mortgage Mortgage, national loan production manager for First assets have been traded on the network to-date. Nationwide Mortgage Corp. and for Weyerhaeuser In March 2000, the company filed a registration Mortgage, and as executive vice president of Internet and statement with the SEC to sell stock to the public in an wholesale B2B channels for FiNet.com. A.A. degree from IPO. The company announced in June 2000 that it had Owens College. cancelled its plans for an IPO -- instead opting for additional funding from its existing investors -- and was INTERNET INFRASTRUCTURE withdrawing its registration statement. Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications Mirror Locations: None Hardware Platform: Sun Microsystems Operating System: Windows NT, Solaris UNIX Web Server Software: Stronghold Apache; Microsoft IIS Commerce Platform: Proprietary applications Web Servers: One Application Servers: One Database Platform: Oracle Database Servers: One Personalization: Under consideration Affiliate Management: Not used Payment Processing: Not used

OPERATING BENCHMARKS Total Revenue 1999...... $319,000 1998...... $598,000 1997...... $ 44,000

Marketing Expenditures 1999...... $5.56mn 1998...... $2.97mn 1997...... $1.70mn

Technical Development Expenditures 1999...... $1.74mn 1998...... $1.08mn 1997...... $0.97mn

COMMENTS IMX Exchange operates an online marketplace for the wholesale mortgage industry. The company differs from business-to-consumer mortgage sites -- such as iOwn and E-Loan -- which bridge the gap between the consumer and lenders, and instead provides a business-to-business service which links mortgage brokers to prospective lenders.

Ingram Micro Inc. Ingram Micro Home Page 1600 East St. Andrews Place Santa Ana, CA 92799, U.S.A. Tel. 714-566-1000 Fax 714-566-7900

Unique Visitors (March 2000): 72,000 Reach: 0.1% Rank: 9,745

ORGANIZATION Business Sector: Computer hardware/software Founded: 1979 Employees: 15,363 total worldwide Offline Activity Storefronts: None Catalogs Mailed: None Principal U.S. Facilities: • Santa Ana, CA headquarters • Williamsville, NY Eastern operations center MARKETING • Fullerton, CA distribution facility Media: Business periodical advertising, direct mail • Newark, CA distribution facility Partnerships: None • Miami, FL distribution facility Affiliates Program: None • Carol Stream, IL distribution facility • Jonestown, PA distribution facility MANAGEMENT • Millington, TN distribution facility Guy Abramo, Senior Vice President and Chief • Carrollton, TX distribution facility Information Officer • Santa Ana, CA returns processing center Patrick Collins, Senior Vice President of Sales • Memphis, TN assembly/integration center Jerry Lumpkin, Senior Vice President of Marketing • 63 international distribution centers in 29 countries Ownership: Public INTERNET INFRASTRUCTURE Trading Symbol: IM (NYSE) Design Consultants: KPMG High Tech Consulting Group Major Shareholders: Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) • Ingram Family (48%) Access Provider: Sprint Internet Services, Global Shareholder Equity: $1.967 billion Crossing Profitable: Yes ($183.42 million profit for FY ’00) Internet Connectivity: Two shared DS-3 lines Hardware Platform: Sun Microsystems WEBSITE OVERVIEW Operating System: Solaris UNIX Website: www.ingrammicro.com Web Server Software: Netscape Enterprise Server 3.06 Site Launch: July 1996 Commerce Platform: Proprietary applications Site Version: 2.0 Web Servers: One Sun Enterprise 10000 server Site Type: Business-to-business Application Servers: One Sun Enterprise 10000 server Business Model: Fixed pricing, auction/negotiated pricing Database Platform: Oracle; real-time links to back-end (Auction Block) proprietary IMpulse ERP system for inventory availability Site Size: 250,000+ product SKUs; 50,000+ content pages and customer account information Languages: English Database Servers: None; application server links to back- Accepts Advertising: No end database via Java applications/Enterprise JavaBeans Site Features: General help components Back-end Integration: Access to customer account Personalization: Planned information, order history, inventory availability, order Affiliate Management: Not used processing, payment processing, and order status are integrated into website.

92 copyright  2000 by The Intermarket Group The eCommerce Almanac

Payment Processing: Open Market Transact, proprietary approximately $250 million during the first three months applications of 2000. Other Applications: Vignette StoryServer, pcOrder The company added an online, real-time auction service configurator and technical notes -- Auction Block -- to its site in 1998, enabling resellers to bid on unopened products which are either discontinued, OPERATING BENCHMARKS contained in damaged packaging, or are otherwise not Total Revenue1 returnable to suppliers. 1999...... $28.07mn The company is a supporter of RosettaNet. It is also a 1998...... $22.03bn partner in Viacore, which is developing an e-commerce 1997...... $16.58bn hub -- based on the RosettaNet specification -- that enables companies to exchange real-time business information. International Sales1 1999...... 40% 1998...... 35% 1997...... 31%

Active Customers (end of period)1 1999...... 175,000 (approx.) 1998...... 140,000 (approx.) 1997...... 100,000 (approx.)

1. Based on sales from all sources because company does not breakout data for web activity

COMMENTS Ingram Micro is the computer industry’s leading distributor, stocking more than 280,000 product SKUs from over 1,700 hardware manufacturers, networking equipment suppliers, and software publishers. The company’s customers consist of more than 175,000 resellers in over 100 countries. Ingram subsidiaries or offices are located in more than 30 countries worldwide. The company established an eSolutions Group in May 1999 to manage its website and Internet initiatives. The Ingram website was completely re-designed and re- architected in 1999. The site provides resellers in the U.S. and Canada access to product and technical information, real-time contract pricing and quote generation, product allocations, inventory availability across every Ingram warehouse, custom system configuration, online ordering, purchase-order financing, and order status information. The company plans to extend the availability of all of its site’s features to the rest of its international customers during 2000; Internet ordering is already available in 17 countries. Online sales were an estimated $3 billion -- or 11% of total revenue -- during 1999. In addition to serving VARs (Value-Added Resellers), the company provides the back-end e-commerce engine for numerous online computer hardware and software resellers, including BUY.COM, Outpost.com, and approximately 32 other Internet resellers. The company’s InsideLine service enables online retailers to link directly to Ingram’s mainframe inventory systems for real-time inventory availability. The company also provides outsourced warehouse and distribution services to Internet resellers. Total sales to Internet resellers were

InsWeb Corp. InsWeb Home Page 901 Marshall Street Redwood City, CA 94063, U.S.A. Tel. 650-298-9100 Fax 650-298-9101

Unique Visitors (March 2000): 2,175,000 Reach: 3.2% Rank: 247

ORGANIZATION Business Sector: Financial services/Banking/Brokerage Founded: March 1995 Employees: 270 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • • Redwood City, CA headquarters AutoMall.com (www.automall.com) • • Westlake Village, CA customer service facility Banx.com Inc. (www.banxquote.com) Telecenter: One in-house call center • Capital One (www.capitalone.com) Ownership: Public • Cars.com (www.cars.com) Trading Symbol: INSW (NASDAQ) • CarPrices.com (www.carprices.com) Major Shareholders: • CarSmart Network (www.carsmart.com) • Hussein Enan, CEO (15%) • Consumers Car Club (www.carclub.com) • Softbank Corp. (27%) • coolsavings.com inc. (www.coolsavings.com) • Nationwide Mutual Insurance (9%) • eHealthInsurance (www eHealthInsurance.com) • Insurance Information Exchange (7%) • E-Loan Inc. (www.eloan.com) • Century Capital (4%) • E*Trade Group Inc. (www.etrade.com) Financing: $188.26 million in three rounds and IPO • GO Network (www.go.com) Profitable: No ($36.2 million loss for FY ’99) • Go2Net Inc. (www.go2net.com) • InfoSpace Inc. (www.infospace.com) WEBSITE OVERVIEW • LifeMinders.com (www.lifeminders.com) Website: www.insweb.com • LookSmart Ltd. (www.looksmart.com) Site Launch: October 1995 • Microsoft Corp. (www.msn.com) Site Type: Business-to-consumer, business-to-business • Morningstar Inc. (www.morningstar.com) Business Model: Commission-based • NBC Internet (www.snap.com) Site Size: 50+ insurance carriers, 10,000+ content pages • NextCard Inc. (www.nextcard.com) Languages: English • Accepts Advertising: No Prodigy Communications (www.prodigy.com) • Site Features: General help, contextual help, online real- Realtors Information Network (www.realtor.com) • time customer service Recycler Classified (www.recycler.com) Back-end Integration: Access to customer account • Time Inc. (www.money.com) information and transaction processing are integrated into • USA Today (www.usatoday.com) website. • Wingspan Bank.com (www.wingspan.com) • Yahoo!, Inc. (insurance.yahoo.com) MARKETING • ZDnet (www.zdnet.com) Media: Radio and television advertising, consumer • InsWeb has negotiated more than 180 marketing periodical advertising partnerships as of March 31, 2000 Representative Partnerships: Affiliates Program: InsWeb Associates Program • America Online (www.netscape.com) Number of Affiliates: n/a • America Online (www.compuserve.com) Commission Rate: $2.00-3.00 for each e-mail • America Online (www.digitalcity.com) quotation and $3.00-4.00 for each instant quotation • AllApartments (www.allapartments.com) based on monthly volume

94 copyright  2000 by The Intermarket Group The eCommerce Almanac

MANAGEMENT Marketing Expenditures Hussein Enan, Chairman and Chief Executive Officer. 1999...... $33.48mn Previously founded Enan & Company, a reinsurance 1998...... $ 8.95mn intermediary, served as a general partner of E.W. Blanch 1997...... $ 3.17mn and in various executive positions at BEP International. Graduate of the American University in Cairo, Egypt. Development Expenditures Mark Guthrie, Chief Operations Officer. Previously 1999...... $ 8.87mn served in various positions at Industrial Indemnity, 1998...... $10.08mn including senior operating officer of national programs, 1997...... $ 3.21mn and in the International Accounting Division of Intel Corp. B.A. in business administration and finance from COMMENTS California State University, Chico and Master's degree in InsWeb has created an online insurance marketplace International Management from the University of Boston that links consumers directly with insurance companies in Brussels, Belgium. and enables comparison shopping for auto, life, health, Kevin Keegan, President-Insurance Services Group. homeowners, renters, and pet insurance coverage. The Previously served in various positions at database company offers coverage in 41 to 50 states, depending publisher Marshall & Swift, including as president and upon the type of policy. In December 1998, the company COO and vice president of marketing, and in various also announced a joint venture with Softbank Corp. to positions for several McGraw-Hill companies, including launch InsWeb Japan K.K. which will sell insurance online vice president of manufacturing for the Sweets Division. in Japan and South Korea; InsWeb currently owns 25% of B.S. in business administration from Ohio State the venture. University. Total revenue for the first quarter ending March 31, Keith Lippiatt, Chief Technology Officer. Previously 2000 was $8.6 million with a loss of $13.1 million. served in various management positions at Andersen The company’s principal revenue source are transaction Consulting. B.S. in management science from University fees for each qualified lead received -- whether or not the of California, San Diego. consumer actually purchases an insurance policy. Marc Barach, Chief Marketing Officer Participating insurance companies also pay development fees to create the customized interface between their own INTERNET INFRASTRUCTURE systems and the InsWeb site, together with maintenance Design Consultants: None fees for periodic upgrades, changes to a company’s Site Maintenance: In-house staff information on InsWeb servers, the addition of new Hosting Arrangement: On-site server(s) products, and changes in geographic coverage. Access Provider: UUNET/MCI Worldcom, SAVVIS The InsWeb website enables individuals to create a Communications, AT&T personal profile prior to requesting quotes for specific Internet Connectivity: Three DS-3 lines types of insurance coverage. The company currently Mirror Locations: None aggregates this profile data to provide specialized, Hardware Platform: Intel Pentium Internet-focused marketing reports to participating auto Operating System: Windows NT 4 and term life insurance companies. There are currently Web Server Software: Microsoft IIS 4.0 more than 5.8 million consumer profiles in the InsWeb Commerce Platform: Proprietary applications database and the number is growing by approximately 1.2 Web Servers: Multiple Pentium servers million per quarter. Application Servers: Multiple Pentium servers The company has developed proprietary filtering Database Platform: Microsoft SQL Server software which uses criteria set by each participating Database Servers: Multiple Pentium servers insurance company to analyze a consumer's profile and Personalization: Not used determine whether it fits within the company's targeted Affiliate Management: Proprietary application risk profiles. Additionally, the software indicates to each Payment Processing: n/a insurer what impact a particular filter has on the number of Other Applications: Broadbase customer analysis software leads it receives and enables them to make changes. From the consumer’s perspective, the filtering ensures that they OPERATING BENCHMARKS see only quotes from companies who are interested in Total Revenue doing business with them. The company has also 1999...... $21.84mn developed proprietary transmission software components 1998...... $ 4.31mn which custom format consumer profile data for real-time 1997...... $ 0.75mn communication with each participating insurance company based on the requirements of its own systems.

International Business IBM Home Page Machines New Orchard Rd Armonk, NY 10504, U.S.A. Tel. 914-499-1900

Unique Visitors (March 2000): 1,248,000 Reach: 1.9% Rank: 437

ORGANIZATION Market Sector: Computer hardware, software, and consulting services Founded: 1911 Employees: 291,067 (Web Staff: 1,000) Offline Activity MARKETING Storefronts: None Media: Broadcast radio and television advertising, Catalogs Mailed: None newspaper advertising, business and consumer periodical Facilities: N/A advertising, and direct mail Telecenter: 30 In-house call centers with 6,000 (approx.) Partnerships: representatives • ThirdAge Media Inc. (www.thirdage.com) Ownership: Public Affiliate Program: IBM Affiliate Program Trading Symbol: IBM (NYSE) No. of Affiliates: n/a Major Shareholders: N/A Commission Rate: 1-4% of order value based of Shareholder Equity: $20.511 billion product sold Profitable: Yes ($7.692 billion company-wide profit in FY ’99) MANAGEMENT Louis V. Gerstner, Chief Executive Officer WEBSITE OVERVIEW John R. Joyce, Chief Financial Officer Website: www.ibm.com Abby Kohnstam, Senior Vice President, Marketing Site Launch: 1994 Bruce Harrald, Senior Vice President, Strategy Site Version: 9th redesign David Leip, Webmaster Site Type: Business-to-business, business-to-consumer Business Model: Fixed pricing INTERNET INFRASTRUCTURE Site Size: 14,000 (approx.) SKUs Design Consultants: Ogilvy One, RGA Interactive, Languages: 79 country-specific sites in English, Spanish, THINK New Ideas, and Modem Media Portuguese, French, Japanese, Chinese, Dutch, German, Site Maintenance: In-house staff and outside consultants Italian, Russian, Polish, Greek, Hebrew, and six other Hosting Arrangement: Managed hosting languages Access Provider: IBM Global Services’ Events Accepts Advertising: No Infrastructure Site Features: General help, contextual help, online real- Internet Connectivity: Redundant DS-3 lines time customer service, foreign language product Mirror Locations: None; site is hosted in multiple (4) U.S. information and foreign language order pages; threaded locations with architecture replicated at each location and discussions and real-time customer-to-customer chat are each sharing the same filespace for four- way redundancy planned Hardware Platform: IBM RS/6000 Back-end Integration: Access to customer order history, Operating System: AIX inventory availability, order processing, payment Web Server Software: IBM Domino Go Webserver processing, order status, and shipment tracking are Commerce Platform: Lotus Websphere integrated into website; web access to customer account Web Servers: 12 servers information is planned. Application Servers: 12 (approx.) servers Database Platform: IBM Universal Database

96 copyright  2000 by The Intermarket Group The eCommerce Almanac

Database Servers: 3 servers Personalization: Lotus Websphere iOwn Affiliate Management: Proprietary application 333 Bryant Street Payment Processing: Lotus Websphere San Francisco, CA 94107, U.S.A. Other Applications: Tivoli site monitoring software Tel. 415-618-3600 OPERATING BENCHMARKS Fax 415-618-3501 Total Revenue1 1999...... $87.55bn Unique Visitors (March 2000): 325,000 1998...... $81.67bn Reach: 0.5% 1997...... $78.51bn Rank: 1,996

Total Advertising Expenditures1 ORGANIZATION 1999...... $1.76bn Business Sector: Banking/Brokerage/Financial Services 1998...... $1.68bn Founded: October 1996 as HomeShark, Inc. 1997...... $1.71bn Employees: 288 Offline Activity 1. Based on sales from all sources because company does not breakout Storefronts: None data for the online channel Catalogs Mailed: None 2. Based on total advertising budget because company does not Facilities: breakout data for the online channel • San Francisco, CA headquarters • Martinez, CA loan processing facility • Santa Clara, CA engineering facility • Calabasis, CA Genesis 2000 subsidiary • Miami, FL HomeBuilders Financial Network subsidiary Telecenter: In-house call center Ownership: Private (IPO pending) Trading Symbol: IOWN (NASDAQ) Major Shareholders: • Ned Hoyt, Chief Executive Officer • Doll Capital Management • ABN-AMRO • Altos Ventures • NIF Ventures • Tribune Ventures • CIBC • Discovery Ventures • Hyperion Partners II, L.P. • Lehman Brothers • Times-Mirror Corp • Pulitzer Corporation • Weiss, Peck & Greer Venture Partners Financing: $59.269 million in four rounds Profitable: No ($49.834 million loss for FY ‘99)

WEBSITE OVERVIEW Web site: www.iown.com Site Launch: June 1997 Site Type: Business-to-consumer Business Model: Commission based Site Size: Loan offerings from 36 lenders; available in 49 states Languages: English Accepts Advertising: Yes

copyright  2000 by The Intermarket Group 97 The eCommerce Almanac iOwn Home Page • Owners.com Inc. (www.owners.com) • Quote.com Inc. (www.quote.com) • SINA.com (www.sinanet.com) • NBC Internet (www.snap.com) • FutureSteps Affiliates Program: iOwn Affiliate Program No. of Affiliates: 100+ Commission Rate: Per-click and per-lead payment rate options available

MANAGEMENT Edward Hoyt, Chief Executive Officer Paul Holmes, President and Chief Operating Officer William Terry, Vice President, Finance and Chief Financial Officer Baron Wilhelm, Vice President, Affinity and Wholesale Lending Charles Reed, Vice President, Capital Markets Marcia Donner, Vice President, Customer Service and Operations Michael Zimmerman, Vice President, Consumer Channel Kevin Flood, Vice President, Engineering Jennifer A.M. Marshall, Vice President, Product Development Laura Piltz, Vice President, Marketing Site Demographics: 70% male/30% female, 75% graduated college, 65% aged 35-54 years old, 50% have INTERNET INFRASTRUCTURE $100K+ household income Design Consultants: None Site Features: General help, contextual help Site Maintenance: In-house staff Back-end Integration: Access to customer account Hosting Arrangement: Managed hosting information, transaction processing, transaction status, are Access Provider: Global Crossing Global Center, integrated into website. AboveNet Communications Mirror Locations: None MARKETING Hardware Platform: Intel Pentium Media: Radio and television advertising, newspaper Operating System: Windows NT and Linux advertising Web Server Software: Microsoft IIS and Apache Major Partnerships: Commerce Platform: Proprietary applications • AT&T WorldNet (www.att.net) Web Servers: 20 • America Online (www.digitalcities.com) Database Platform: Microsoft SQL Server and Oracle 8 • America Online (www.netscape.com) Database Servers: Five • Ameritrade Holding Corp. (www.ameritrade.com) Personalization: Not used • BellSouth.net (www.bellsouth.net) Affiliate Management: Proprietary application • CFN (www.youdecide.com) • Classified Ventures (www.classifiedventures.com) OPERATING BENCHMARKS • CyberHomes(www.cyberhomes.com) Total Revenue • Earthlink/MindSpring (www.wizshop.com) 1999...... $14.77mn • Hardware.com (Superbuild) 1998...... $ 1.31mn • Harmon Homes 1997...... $ 0.07mn • Homes.com Inc. (www.homes.com) Transaction Revenue • Homefair.com (www.homefair.com) 1999...... $9.02mn • HomeWareHouse Inc. (www.homewarehouse.com) • 1998...... $1.22mn Hoovers Inc. (www.hoovers.com) 1997...... $0.05mn • Infospace Inc. (www.infospace.com) • Netcentives Inc. (www.clickrewards.com) • OnMoney (www.onmoney.com)

98 copyright  2000 by The Intermarket Group The eCommerce Almanac

Marketing Expenditures 1999...... $19.13mn iPrint.com, inc. 1998...... $ 6.11mn 1450 Oddstad Drive 1997...... $ 0.57mn Redwood City, CA 94063 Tel. 650-298-8500 Development Expenditures 1999...... $10.39mn Fax. 650-364-7724 1998...... $ 4.79mn 1997...... $ 0.97mn Unique Visitors (March 2000): 3,511,000 Reach: 5.2% Loan Volume Rank: 107 1999...... $511.45mn 1998...... $192.39mn ORGANIZATION 1997...... $ 8.61mn Business Sector: Business/Office supplies Founded: 1995 Total Loans Closed Employees: 225 (3/10/00) 1999...... 3,200 Offline Activity 1998...... 1,028 Storefronts: None 1997...... 38 Catalogs Mailed: None Facilities: Redwood City, CA headquarters COMMENTS Telecenter: None iOwn provides mortgage financing services and related Ownership: Public home-buying and homeownership information through its Trading Symbol: IPRT (NASDAQ) website at www.iown.com. The company launched its Major Shareholders: online mortgage brokerage in July 1997, under the name • Royal Farros, Chairman and Chief Executive Officer HomeShark, and closed its first loans in August 1997. The • SOFTBANK Venture Capital company name was changed to iOwn in April 1999, • AT&T Ventures reflecting a broadened strategy of providing resources • Information Technology Ventures related to all aspects of the home buying process and not • Canaan Partners just arranging financing. • Intel Corp. In March 1998, the company acquired HomeScout, a Financing: $75.2 million in three rounds and IPO provider of home listings, for $2 million in cash. The Profitable: No ($13.432 million loss for FY ’99) HomeScout content has since been integrated into the iOwn website. In December 1999, acquired Genesis 2000, WEBSITE OVERVIEW which develops loan origination and processing software Website: www.iprint.com for mortgage brokers, for $26.2 million in iOwn stock and Site Launch: January 1997 notes. The company also acquired in December 1999 the Site Type: Business-to-business, Business-to-consumer HomeBuilders Financial Network, which provides loan Business Model: Fixed pricing services to home builders, for $2.7 million in cash and Site Size: 3,500 products across 45 categories, including $41.5 million in iOwn stock and notes. custom-printed stationery, ad specialty products, promotional items, and gifts Languages: English Accepts Advertising: No Site Features: General help, one-click ordering/quick buy, contextual help, customer created content Back-end Integration: Access to customer account information, order history, order processing, payment processing, order status, and shipment tracking are integrated into website.

MARKETING Media: Radio and television advertising, newspaper advertising, consumer and business periodical advertising, direct mail

copyright  2000 by The Intermarket Group 99 The eCommerce Almanac iPrint.com Home Page MANAGEMENT Royal P. Farros, Chairman and Chief Executive Officer. Previously founded and served as chairman of software developer T/Maker Company. Also served as executive vice president of Deluxe Corp.’s Electronic Direct Group after Deluxe’s acquisition of T/Maker and computer marketing engineer and staff manager for Hewlett-Packard Company. B.S. and M.S. degrees in Industrial Engineering from Stanford University. James P. McCormick, Chief Financial Officer. Previously served as General Magic's Chief Operating Officer and Chief Financial Officer. Also served as Vice President, Finance and Administration and Chief Financial Officer at UB Networks. Bachelor of Business Administration degree from the University of Toledo, and MBA in Finance and Accounting from the University of Michigan. Nickoletta Swank, Vice President-Strategic Relationships. Previously served as Director of International Sales for T/Maker Company and as senior manager in manufacturing group of Andersen Consulting. B.S. in Industrial Engineering from Stanford University. David Hodson, Vice President-Technology. Previously served as a senior technologist for Deluxe Corp. (Electronic Direct division) in charge of retail product development and as an Electronic Commerce Specialist at VISA International. B.S. in Management Information Partnerships: Systems and M.B.A. from California State University, • America Online (www.compuserve.com) Chico. • Classmates Online (www.classmates.com) Talbot Harty, Vice President-Information Technology. • Concentric Networks (www.concentric.com) Previously served as senior vice president of engineering • eBay Inc. (www.ebay.com) and operations, Internet Services Division, at General • EarthLink Network, Inc. (www.wizshop.com) Magic, Inc. Also served as director of information • eFax.com (www.efax.com) technology at NEC Electronics, Inc., and held executive positions at Newbridge Networks and UB Networks. • eGroups Inc. (www.egroups.com) Greg Korjeff, Vice President-Operations. Previously • Excite@Home (www.excite.com) • served as chief administrative officer at Accountants Inc., Impresse (www.impresse.com) a national staffing services company, and in various • Intel Corp. (www.intel.com) financial and operational positions in the Bankcards • MyPoints.com Inc. (www.mypoints.com) Division of Citicorp. A.B. from Dartmouth College. • Netcentives Inc. (www.clickrewards.com) • OfficeMax (www.officemax.com) INTERNET INFRASTRUCTURE • PetStore.com (www.petstore.com) Design Consultants: None • Sir Speedy (www.sirspeedy.com) Site Maintenance: In-house staff • 3M (www.3M.com) Hosting Arrangement: On-site server(s) • uReach.com (www.ureach.com) Access Provider: UUNET/MCI Worldcom, Multiple • Xoom.com (www.xoom.com) providers for redundancy and diversity • Yahoo! Inc. (www.yahoo.com) Internet Connectivity: Multiple T-1 lines, burstable to Affiliates Program: iPrint.com Associate Program facilitate traffic No. of Affiliates: 4,000 Mirror Locations: None; currently in process Commission Rate: 5-9% based on quarterly Hardware Platform: Dell and Sun Microsystems cumulative value of orders Operating System: Microsoft Windows NT 4 Web Server Software: Netscape Enterprise Server Commerce Platform: Proprietary application Web Servers: Multiple servers Database Platform: Proprietary application

100 copyright  2000 by The Intermarket Group The eCommerce Almanac

Database Servers: Multiple servers Personalization: Proprietary application iQVC Affiliate Management: Commission Junction, Proprietary QVC, Inc. application Goshen Corporate Park Payment Processing: CyberCash West Chester, PA 19380, U.S.A. OPERATING BENCHMARKS Tel. 610-701-1000 Total Revenue Fax 610-701-8900 1999...... $3.26mn 1998...... $0.57mn Unique Visitors (March 2000): 1,592,000 1997...... $0.17mn Reach: 2.4% Rank (qvc.com and iqvc.com) 388 Marketing Expenditures 1999...... $8.13mn ORGANIZATION 1998...... $0.97mn Business Sector: General merchandise 1997...... $0.18mn Founded: June 1986 Employees: 9,700 total staff Development Expenditures Offline Activity 1999...... $3.54mn Storefronts: 6 outlet stores 1998...... $0.90mn Catalogs Mailed: None 1997...... $0.35mn Facilities: • West Chester, PA headquarters and TV studios Total Customers (end of period) • San Antonio, TX telecom facility 1999...... 380,000 • Chesapeake, VA telecom facility • Port St. Lucie, Fl telecom facility Registered Users (end of period) • Lancaster, PA distribution facility 1999...... 775,000 • West Chester, PA distribution facility • Suffolk, VA distribution facility COMMENTS Telecenter: Three in-house U.S. call centers with 5,000 iPrint.com’s services enable individual and small permanent representatives business customers to purchase printing online through the Ownership: Private company’s own website at www.iprint.com and through Trading Symbol: None private-label partnerships. The company offers printing Major Shareholders: services for stationary and business cards, invitations, • Comcast Corp. (57%) apparel, mugs, and a wide variety of other specialty items. • A proprietary design engine enables customers to Liberty Media (43%) layout their original artwork across the Internet, Shareholder Equity: n/a incorporate uploaded graphics, and store the results on Profitable: Yes ($538.8 million pre-tax profit company- iPrint.com’s servers for future use. The iPrint.com system wide for FY ’99; iQVC division is profitable but company is automated and connects electronically to the company’s does not breakout results) commercial print vendors on the back-end. Total revenue for the first quarter ending March 31, WEBSITE OVERVIEW 2000 was $3.03 million with a loss of $11.86 million. Website: www.qvc.com, www.iqvc.com Approximately 58% of revenue originated through the Site Launch: September 1996 company’s own website, 18% was generated through Site Type: Business-to-consumer marketing relationships and co-branded website, and 5% Business Model: Fixed pricing was generated through private label websites operated by Site Size: 100,000 (approx.) products iPrint.com on behalf of several commercial printers and Languages: English office supply chains. The company ended the period with Accepts Advertising: No 550,000 customers. Site Features: General help, one-click ordering/quick buy, online real-time customer service, real-time customer-to- customer chat, threaded discussions Back-end Integration: Access to order processing, order status, and order history are integrated into website.

MARKETING Media: Television advertising (exclusively on QVC)

copyright  2000 by The Intermarket Group 101 The eCommerce Almanac iQVC Home Page MANAGEMENT Steve Hamlin, Vice President, Operations, iQVC

INTERNET INFRASTRUCTURE Design Consultants: Studio Archetype Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) Access Provider: Genuity Inc. Internet Connectivity: One DS-3 line Mirror Locations: None Hardware Platform: Intel Pentium Operating System: Windows NT Web Server Software: Microsoft IIS 4.0 Commerce Platform: Microsoft Site Server Commerce Edition; proprietary applications Database Platform: Microsoft SQL Server Personalization: Not used Affiliate Management: Not used Payment Processing: Proprietary back-end legacy application Other Applications: LivePerson real-time customer service chat, iChat 3.0

OPERATING BENCHMARKS Total Revenue 1999...... $2.8bn 1998...... $2.4bn 1997...... $2.1bn

Online Sales (est.) 1999...... $97mn 1998...... $38mn 1997...... $16mn

COMMENTS iQVC is the online division of the television shopping channel pioneer, QVC, Inc. QVC, Inc. sold $2.8 billion in brand name products during 1999, including home furnishings, licensed products, fashion and beauty products, electronics, and jewelry. The company’s shopping channel reaches more than 70 million U.S. homes. QVC purchased a 36% stake in Knot.com, a wedding resource site, for $15 million in April 1999. The two companies agreed to jointly create a national online gift registry and QVC agreed to provide back office operations and distribution services for all of Knot.com’s electronic commerce activities. iQVC fulfills orders from either one of the company’s three U.S. warehouses or from one of the company’s 300+ virtual warehouses…suppliers who are linked to the company via extranet and drop ship directly to the customer. All QVC and iQVC customers are able to easily Partnerships: return unwanted orders using the original shipping box and • The Knot Inc. (www.theknot.com) a shipping label that’s included on the back of each • Microsoft Corp. (www.msn.com) packing slip. Affiliates Program: None

102 copyright  2000 by The Intermarket Group The eCommerce Almanac

The company reports that 30% of its annual sales during 1999 were generated in November/December and J. Crew Group Inc. that more than 700,000 items were shipped between 770 Broadway November 1 and December 22. New York, NY 10013, U.S.A. Tel. 212-209-2500 Fax 212-209-2666

Unique Visitors (March 2000): 766,000 Reach: 1.1% Rank: 945

ORGANIZATION Business Sector: Clothing Founded: 1968 Employees: 5,400 (25+ web staff) Offline Activity Storefronts: 127 J. Crew and J. Crew Factory Outlet stores Catalogs Mailed: 75.5 million Facilities: • New York, NY headquarters • Lynchburg, VA distribution facility • Asheville, NC distribution facility Telecenter: Two in-house call centers in Lynchburg, VA and Asheville, NC with 900+ permanent representatives Ownership: Private Trading Symbol: None Major Shareholders: • Texas Pacific Corp. (62%) • Emily Cinader Woods, Chairman (20%) Shareholder Equity: -$264.6 million Profitable: No ($6.6 million loss for FY ’00)

WEBSITE OVERVIEW Website: www.jcrew.com Site Launch: August 1995 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 1,500 products (approx.) plus ability to order any hardcopy catalog item by product number Languages: English Accepts Advertising: No Site Features: General help, one-click ordering/quick buy Back-end Integration: Access to customer account information, order history, and product availability are integrated into website.

MARKETING Media: Direct mail Partnerships: • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.compuserve.com) • America Online (www.netscape.com) • BarnesandNoble.com (www.barnesandnoble.com)

J. Crew Home Page OPERATING BENCHMARKS Total Revenue1 2000...... $716.6mn 1999...... $824.3mn 1998...... $834.0mn

Online Revenue1 2000...... $65.3mn 1999...... $22.0mn 1998...... $ 4.0mn

1. Fiscal year ending January 30/31

COMMENTS J. Crew Group is a leading retailer of women's and men's apparel, shoes and accessories which are sold under the company’s own brand name. The company distributes • GiftCertificates.com (www.giftcertificates.com) its products through three different channels: 127 retail and • giftpoint.com (www.giftpoint.com) factory outlet stores across the United States (plus • GTE SuperPages Shop Online (shop.gte.net) approximately 70 licensed free-standing and “shop-in- • Inktomi Corp. (Inktomi Shopping Engine) shop” stores in Japan); a mail order catalog; and an • Intuit Inc. (www.quicken.com) Internet storefront, jcrew.com. jcrew.com and its mail • Lycos, Inc. (www.lycos.com) order catalog counterpart comprise the J. Crew Direct unit • Travelocity.com LP (www.travelocity.com) of J. Crew Group. Affiliates Program: jcrew.com affiliate network Number of Affiliates; n/a Commission Rate: 5% of total sales value

MANAGEMENT Richard Boyce, Chief Executive Officer Scott Rosen, Sr. Vice President and Chief Financial Officer Tom Lesica, Sr. Vice President and CIO Scott Gilbertson, President of eCommerce Sundir Rajan, Director of Web Development

INTERNET INFRASTRUCTURE Design Consultants: Fort Point Partners Site Maintenance: In-house staff Hosting Arrangement: Managed hosting Access Providers: DIGEX Inc.; Akamai Technologies Mirror Locations: None Hardware Platform: Sun Microsystems Operating System: Solaris UNIX Web Server Software: Netscape Enterprise Server 3.6 Commerce Platform: ART Technology Group Dynamo, Proprietary Java applications Web Servers: Multiple Sun Enterprise 3000 servers Database Platform: Oracle Database Servers: Sun Enterprise 3000 server Personalization: Under development Affiliate Management: Proprietary Java application Payment Processing: Proprietary application Other Applications: Personify Essentials, RedCart Universal Shopping Cart, Kana Solution customer support, E-Color True Internet Color

104 copyright  2000 by The Intermarket Group The eCommerce Almanac

JCP Internet Commerce InsWeb Home Page Solutions, Inc. J.C. Penney Company, Inc. 6501 Legacy Drive Plano, TX 75024, U.S.A. Tel. 972-431-1000 Fax 972-431-1977

Unique Visitors (March 2000): 1,973,000 Reach: 2.9% Rank: 290

ORGANIZATION Business Sector: General merchandise Founded: 1902 Employees: 291,000 total (1,000+ IT staff) Offline Activity Storefronts: 1,143 Catalogs Mailed: n/a Facilities: • Plano, TX headquarters • Catalog fulfillment centers in Atlanta, GA, Milwaukee, WI, and four other locations Telecenter: In-house call centers in 14 locations across the U.S. Ownership: Public Trading Symbol: JCP (NYSE) Major Shareholders: n/a • America Online (www.compuserve.com) Shareholder Equity: $7.23 billion • America Online (www.netscape.com) Profitable: Yes ($336 million profit from all operations in • FY ’00) Big Planet (www.bigplanet.com) • FairMarket, Inc. (FairMarket Network) • WEBSITE OVERVIEW Levi Strauss & Company (www.levi.com) Website: www.jcpenney.com • Lycos Inc. (www.lycos.com) Site Launch: November 1994; August 1996 (commerce- Affiliates Program: JC Penney Affiliate Network enabled version) No. of Affiliates: n/a Site Type: Business-to-consumer Commission Rate: 4-8% based on total sales volume Business Model: Fixed pricing Site Size: 20,000 (approx.) product SKUs plus ability to MANAGEMENT order any hardcopy catalog item by product number Vanessa Castagna, Executive Vice President and Chief Languages: English Operating Officer for Stores, Merchandise, Catalog and Accepts Advertising: No Internet Site Features: General help Paul Pappajohn, President, JCPenney E-commerce Back-end Integration: Access to customer account Richard Last, Executive Vice President of E-commerce information, inventory availability and order processing Ray Pierce, Senior Vice President and Director of Special are integrated into website. Projects David Evans, Senior Vice President and Chief MARKETING Information Officer Media: Television advertising, newspaper advertising, Andy Cowan, Vice President and Director of Retail and direct mail Catalog Systems. Partnerships: • America Online (proprietary dial-up service) INTERNET INFRASTRUCTURE • America Online (www.aol.com) Design Consultants: Modem Media Site Maintenance: In-house staff copyright  2000 by The Intermarket Group 105 The eCommerce Almanac

Hosting Arrangement: On-site server(s) physical proportions, face shape, hair style and color, and Access Provider: Cable & Wireless, Akamai Technologies skin tone. Internet Connectivity: Multiple shared DS-3 lines In March 2000, the company announced a partnership Mirror Locations: None with Event411.com to jointly develop an integrated in- Hardware Platform: Dell Computer store and online gift registry and to add Event411.com’s Operating System: Windows NT 4 wedding planning package to the jcpenney.com website Web Server Software: Netscape Enterprise Server, for use by bridal registrants. Microsoft IIS 4.0 An online auction service was launched in partnership Commerce Platform: Microsoft Site Server Commerce with FairMarket in April 2000 and enables customers to Edition, proprietary applications bid on items in both traditional auctions and Web Servers: 100+ Dell PowerEdge 6350 servers AutoMarketdown or reverse auctions. The company plans Database Platform: Microsoft SQL Server to initially offer overstock merchandise from its catalog Personalization: Not used and retail operations. The auction service will be included Affiliate Management: LinkShare in the FairMarket Network, providing the company access Payment Processing: Proprietary application to portal sites MSN, Lycos and Excite@Home. Other Applications: HydraWEB Technologies Traffic The company has also negotiated partnerships with Management software, General Interactive EchoMail, KD1 online retailers Omaha Steaks, Rocky Mountain Chocolate Greenlight suite, Public Technologies Multimedia My Factory, Flowers Direct, and Little Tikes Toys to build co- Virtual Model 3-D software branded storefronts which are accessible from its website.

OPERATING BENCHMARKS Total Catalog Sales1 1999...... $3.964bn 1998...... $3.908bn 1997...... $3.772bn

Online Sales1 1999...... $102mn 1998...... $ 15mn 1997...... n/a

Total Advertising Expenditures1 2 1999...... $1.05bn 1998...... $1.08bn 1997...... $0.98bn

1. Fiscal year February 1 – January 31 2. Based on company-wide spending because company does not breakout data for web activity

COMMENTS J.C. Penney Company is one of the largest retailers in the U.S., operating more than 1,100 J.C. Penney stores and almost 2,900 Eckerd drugstores. Vanessa Castagna, executive vice president and COO for stores, merchandise, catalog and Internet predicted in February 2000 that the company’s Internet business would grow to $1 billion in sales over the next three years by leveraging its 35 years of experience in the catalog business and its extensive fulfillment infrastructure. A specialized website offering “plus size” apparel for women, Just4MePlus.com, was launched in May 1999. The site was re-launched in March 2000 after a redesigned by the company and Public Technologies Multimedia which incorporated 3-D modeling features which enable customers to create a likeness of themselves reflecting

106 copyright  2000 by The Intermarket Group The eCommerce Almanac

KBkids.com L.L.C. KBkids.com Home Page 1099 Eighteenth Street, Suite 1000 Denver, CO 80202, U.S.A. Tel. 303-228-9000

Unique Visitors (March 2000): 644,000 Reach: 1.0% Rank: 971

ORGANIZATION Business Sector: Toys/Sporting Goods Founded: June 1999 Employees: 105 Offline Activity Storefronts: 1,322 (parent company, KB Toys) Catalogs Mailed: None Facilities: Denver, CO headquarters Telecenter: Outsourced Ownership: Private Trading Symbol: None Major Shareholders: • Consolidated Stores • BrainPlay.com, Inc. • KBkids.com Inc. • Srikant Srinivasan, Founder, BrainPlay.com Financing: $80 million in one round Profitable: No ($17.291 million loss for 12 months ended 9/30/99)

WEBSITE OVERVIEW Website: www.kbkids.com Site Launch: July 1999 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 10,000 product SKUs from 100 different brands Languages: English Accepts Advertising: No Site Features: General help, customer created content, threaded discussions Back-end Integration: Access to customer account information, order processing, and payment processing are integrated into website. • LookSmart Ltd. (www.looksmart.com) MARKETING • Netcentives Inc. (www.clickrewards.com) Media: Television and radio advertising, newspaper • NetZero Inc. (www.netzero.com) advertising, consumer periodical advertising, direct mail • Women.com Networks (www.women.com) Partnerships: • Xoom.com (www.xoom.com) • America Online (proprietary dial-up service) • • Yahoo! Inc. (www.yahoo.com) America Online (www.aol.com) Affiliate Program: KBkids Affiliate Program • America Online (www.compuserve.com) No. of Affiliates: n/a • America Online (www.netscape.com) Commission Rate: $7.50 per new customer plus • Buena Vista Internet (www.disney.com) 5-12% of total sales per quarter based on volume • Excite@Home (www.excite.com) • GO Network (www.go.com)

MANAGEMENT Marketing Expenditures Michael Wagner, Chief Financial Officer. Previously 1999 (Q3) ...... $5.16mn served as vice president of strategic planning and investor 1999 (Q2) ...... $1.54mn relations and as assistant treasurer of Consolidated. B.S. in 1999 (Q1) ...... $0.87mn Accounting from Marquette University. 1998...... $1.83mn Shawn Davison, Vice President of Technology. Previously served as vice president of technology and Development Expenditures operations at BrainPlay.com, senior consultant and 1999 (Q3) ...... $1.25mn architect at Bold Tech Systems, and service architect and 1999 (Q2) ...... $0.75mn development lead at US West Enterprise Networking 1999 (Q1) ...... $0.30mn Services. B.S. in Computer Information Systems from 1998...... $1.07mn DeVry Institute of Technology and M.S. in Telecommunications from the University of Colorado at COMMENTS Boulder. KBkids.com is an online specialty toy retailer, created David Novitsky, Vice President of Merchandising. in June 1999 as a joint venture between Consolidated Previously served as vice president of sales and marketing Stores (NYSE: CNS) and BrainPlay.com. BrainPlay, an at Peachtree Playthings and in various capacities, including online toy retailer founded in August 1995, contributed senior buyer, at KB Toys. B.S. in Marketing from substantially all of its assets and liabilities to the Pennsylvania State University. partnership and Consolidated contributed $80 million in Scott Wilder, Vice President of Product Development. cash plus approximately $4 million in intangible assets. Previously served as director of Internet services for Consolidated operates approximately 2,500 stores Borders.com, in various e-commerce and product across the U.S., including the discount Pic ‘N Save chain development positions at America Online's Internet and KB Toys. KB Toys is the second largest specialty toy properties, GNN and WebCrawler, and in key retailer in the U.S. with approximately 1,300 stores development positions at Apple Computer. B.A. in nationwide. English from Vassar College, M.A. in International The company has agreements with KB Toys that enable Studies from The Johns Hopkins University and M.B.A. it to access services as needed on a fee basis for from New York University. purchasing, advertising, toy research, licensing, data access, processing customer returns, inventory liquidation, INTERNET INFRASTRUCTURE and legal and financial services. Order fulfillment is Design Consultants: None outsourced to Keystone Internet Services. Site Maintenance: In-house staff At the end of 1999, the company had more than Hosting Arrangement: Co-located server(s) 417,000 customers. In January 2000, the company filed a Access Provider: Global Crossing GlobalCenter, Verio registration statement with the U.S. Securities and Inc., Akamai Technologies Exchange Commission for an initial public offering (IPO) Mirror Locations: One of approximately $210 million in common stock. In May Hardware Platform: Sun Microsystems 2000, the company announced plans to postpone the IPO Operating System: Solaris UNIX and laid-off approximately 45 employees (30% of the Commerce Platform: Smith-Gardner WebOrder workforce) as a stipulation to Consolidated Stores in return Web Servers: Multiple Sun 4500 and 6500 Enterprise for additional funding. In June 2000, the company’s Servers planned IPO was withdrawn by Consolidated Stores. Database Platform: Oracle 8i Database Servers: Multiple Sun 4500 and 6500 Enterprise Servers Personalization: Smith-Gardner WebOrder; Net Perceptions Group Lens Affiliate Management: LinkShare Payment Processing: Smith-Gardner Other Applications: F5 Networks Big/IP

OPERATING BENCHMARKS Total Revenue 1999 (Q3) ...... $1.05mn 1999 (Q2) ...... $0.50mn 1999 (Q1) ...... $0.11mn 1998...... $0.51mn

108 copyright  2000 by The Intermarket Group The eCommerce Almanac

Lands’ End, Inc. Lands’ End Home Page 1 Lands’ End Lane Dodgeville, WI 53595, U.S.A. Tel. 608-935-9341 Fax 608-935-4998

Unique Visitors (March 2000): 514,000 Reach: 0.8% Rank: 1,428

ORGANIZATION Business Sector: Clothing Founded: 1963 Employees: 4,600+ permanent, 7,400-9,600 total Offline Activity Storefronts: 17 U.S., 2 international Catalogs Mailed: 236 million Facilities: • Dodgeville, WI headquarters • Dodgeville, WI call center • Reedsburg, WI call center • Cross Plains, WI call center • Dodgeville, WI distribution facility • Reedsburg, WI distribution facility • West Union, IL manufacturing facility • Elkader, IL manufacturing facility • Fujieda City, Japan distribution facility • Oakham, U.K. order and distribution center • Yokohama, Japan order and distribution center • Mettlach, Japan order and distribution center • Maia, Portugal corporate offices Telecenter: Six in-house call centers with 1,000 (approx.) representatives on duty at any given point in time Ownership: Public Trading Symbol: LE (NYSE) Major Shareholders: n/a Shareholder Equity: $296.2 million Profitable: Yes ($48.034 million profit from all operations for FY ’00)

WEBSITE OVERVIEW information, inventory availability, order processing, Website: www.landsend.com, www.landsend.co.jp payment processing, and shipment tracking are integrated Site Launch: July 1995 into website. Site Type: Business-to-consumer, business-to-business Business Model: Fixed pricing MARKETING Site Size: 7,000 (approx.) product SKUs plus ability to Media: Radio and television advertising, newspaper order any hardcopy catalog item by product number advertising, consumer and business periodical advertising, Languages: English, Japanese and German direct mail Accepts Advertising: No Partnerships: Site Features: General help, one-click ordering/quick buy, • America Online (proprietary dial-up service) online real-time customer service, foreign language • America Online (www.aol.com) product information and order pages • America Online (www.compuserve.com) Back-end Integration: Access to customer account • America Online (www.netscape.com) • Ariba, Inc. (Ariba.com Network) copyright  2000 by The Intermarket Group 109 The eCommerce Almanac

• Commerce One Inc. (marketSite trading portal) International Sales1 2 • Earthlink Inc. (www.wizshop.com) 2000...... 10.8% • Prodigy Services Corp. (shopnet.prodigy.com) 1999...... 10.6% • Yahoo! Inc. (www.yahoo.com) 1998...... 10.4% Affiliates Program: Lands’ End Affiliate Network 1997...... 8.6% Number of Affiliates: n/a Commission Rate: 5% of order value Advertising Expenditures1 2000...... $225.0mn MANAGEMENT 1999...... $262.9mn Francis Schaecher, Senior Vice President of Operations 1998...... $226.7mn Bill Brass, Senior Vice President of e-commerce 1997...... $195.7mn David Zentmyer, Vice President and Managing Director- Internet Active Customers2 3 Ron Frey, Vice President of Research and Development 2000...... 10.3mn Michael Grasee, Director of Internet Business 1999...... 10.1mn Development 1998...... 9.6mn Willy Doyle, Manager of Advertising and Electronic 1997...... 9.0mn Media 1. Fiscal year February 1 through January 31. 2. Based on sales from all sources because company does not break out INTERNET INFRASTRUCTURE data for web activity Design Consultants: Berbee Information Networks 3. Customers making at least one purchase in last 36 months. Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) COMMENTS Access Provider: Berbee Information Networks, Akamai Lands' End is a leading direct marketer of traditional Technologies clothing, and soft luggage and home products. The Internet Connectivity: One 10Mbps connection demographics of Lands’ End customers are 52 percent are Mirror Locations: None between 35 and 54 with a median income of $62,000 and Hardware Platform: IBM approximately 90% either attended or graduated from Operating System: IBM AIX, Solaris college. The company generates a substantial majority of Web Server Software: Netscape Enterprise Server 3.6, its sales from the 200+ million catalogs it mails annually. Apache Approximately 80-85% of catalog orders are placed by Commerce Platform: Proprietary applications telephone with the balance placed by the Internet, mail and Web Servers: Multiple RS/6000 servers fax. Database Platform: Oracle, IBM DB2 The Lands’ End website was launched in 1995. More Database Servers: None; real-time link to IBM ES/390 than 400,000 customers completed purchases through the back-end system via IBM MQSeries MAPI site in 1999 and the online channel accounted for 10.5% of Personalization: Proprietary applications total revenue in the most recent fiscal year (FY 2000). Affiliate Management: LinkShare Approximately 20% of web sales are generated by new Payment Processing: Proprietary application customers. The company added new international sites Other Applications: Vignette StoryServer, webMethods serving Germany and the U.K. in November 1999. B2B Integration Server, Cisco Collaboration Server, In September 1999, a Lands' End Live feature was Public Technologies Multimedia My Virtual Model 3-D added enabling shoppers to either request an immediate telephone call back from a Lands' End personal shopper or OPERATING BENCHMARKS launch a text-based chat to communicate while both Total Revenue1 2 simultaneously view the same Web pages. At the same 2000...... $1.320bn time, the company launched “Shop With a Friend,” which 1999...... $1.371bn allows two people to shop on the company’s site together 1998...... $1.264bn from different computers. Both features are driven by 1997...... $1.119bn Webline Communications’ Collaboration Server software. In March 2000, the company’s corporate sales division Online Sales1 announced a new web strategy that included a redesigned 2000...... $138mn and expanded corporate sales website, partnerships with 1999...... $ 61mn online business-to-business procurement services Ariba 1998...... $ 8mn and Commerce One, and the launch of customized online 1997...... n/a stores for large customers, such as Saturn and Radio Shack. The Custom Online Stores can be tailored to meet

110 copyright  2000 by The Intermarket Group The eCommerce Almanac the merchandise selection and editorial content preferences of each customer and its brand identity requirements. The L.L. Bean, Inc. stores are typically accessible to employees through the Casco Street customer’s own intranet and, if appropriate, can be Freeport, ME 04033, U.S.A. accessed through the Internet at a customer’s retail outlets Tel. 207-865-4761 or other locations. In April 2000, the company launched its own Fax 207-552-6821 proprietary gift certificate service with Complete Business Solutions, enabling customers to purchase and redeem Unique Visitors (March 2000): 528,000 electronic and traditional gift certificates online at the Reach: 0.8% Lands’ End website. Rank: 1,388

ORGANIZATION Business Sector: Apparel, Sporting Goods Founded: 1912 Employees: 4,000 total Offline Activity Storefronts: 12 U.S. stores Catalogs Mailed: 150 million Facilities: • Freeport, ME headquarters • Portland, ME distribution facility • Brunswick, ME manufacturing facility Telecenter: In-house call center with 3,300 (peak season) customer service representatives Ownership: Private Trading Symbol: None Major Shareholders: n/a Shareholder Equity: n/a Profitable: Yes ($10 million (estimated) profit for FY ’99)

WEBSITE OVERVIEW Website: www.llbean.com Site Launch: September 1995 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 5,000 (approx.) product SKUs, plus ability to order 11,000 additional items by product number from hardcopy catalog Languages: English; help pages are provided in Spanish, French, German, and Japanese Accepts Advertising: No Site Features: General help, one-click ordering/quick buy Back-end Integration: Access to customer account information, order processing, and payment processing are integrated into website

MARKETING Media: Television advertising, consumer and business periodical advertising, direct mail Partnerships: • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.compuserve.com) • America Online (www.netscape.com)

L.L. Bean Home Page COMMENTS L.L. Bean is catalog merchandiser specializing in sporting goods and traditional apparel for men, women, and children. The company reported $1.07 billion in revenue for 1999, comprised of $926 million from domestic and international catalog sales and $142 million from retail sales. More than 50 catalogs were published during 1999 with a circulation of approximately 150 million. A content site was launched by the company in September 1995. A commerce-enabled site was launched in the fourth quarter of 1996; a redesigned version of the site was launched in October 1999. Online sales increased by more than 250% in 1999 and the online storefront contributed more than 10% of the company’s total new customers for the period. In addition to its catalogs and website, the company operates a flagship retail store and children’s clothing store in Freeport, Maine, plus another 10 factory outlet stores around the state. The first full-price store outside of Maine is a 75,000 square foot facility in McLean, Virginia which is scheduled to open in July 2000; plans are in the works to open three additional stores by 2001. Twenty L.L. Bean retail stores are operated in Japan through a partnership with Seiyu and Matsushita Electric Industrial.

• BarnesandNoble.com (www.barnesandnoble.com) • FedEx Corp. (FedEx Marketplace) Affiliates Program: None

MANAGEMENT Christopher McCormick, Chief Marketing Officer Pat Robles, Vice President, E-commerce Kathy McCosh, Manager, E-commerce Doug Faherty, Director, Database Marketing

INTERNET INFRASTRUCTURE Design Consultants: Strategic Interactive Group, DIGITAS Inc. Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) Access Provider: UUNET/MCI Worldcom Internet Connectivity: Fractional DS-3 line Hardware Platform: IBM Corp. Operating System: IBM AIX Web Server Software: Netscape Enterprise Server 3.6 Web Servers: Multiple IBM RS/6000 servers Database Platform: IBM DB2 Database Servers: Multiple IBM RS/6000 Personalization: Not used Affiliate Management: Not used Payment Processing: Proprietary application Other Applications: ClickAction Email Relationship Management, Personify Essentials

112 copyright  2000 by The Intermarket Group The eCommerce Almanac

MANAGEMENT Merisel, Inc. Dwight Steffensen, Chief Executive Officer 200 Continental Blvd. Timothy Jenson, Senior Vice President and Chief El Segundo, CA 90245, U.S.A. Financial Officer Tel. 310-615-3080 May West, Vice President of Information Technology Fax 310-615-6819 INTERNET INFRASTRUCTURE Design Consultants: None Unique Visitors (March 2000): n/a Site Maintenance: In-house staff Reach: n/a Hosting Arrangement: Co-located and on-site server(s) Rank: n/a Access Provider: IBM Network Services Internet Connectivity: Two T-1 lines ORGANIZATION Mirror Locations: None Business Sector: Computer hardware/software Hardware Platform: Compaq ProLiant Founded: 1980 Operating System: Microsoft Windows NT 4 Employees: 2,400 Web Server Software: Microsoft IIS 4.0 Offline Activity Commerce Platform: Microsoft Site Server Commerce Storefronts: None Edition, proprietary application Catalogs Mailed: None Web Servers: Three Facilities: Application Servers: Three • El Segundo, CA headquarters Database Platform: Microsoft SQL Server 7.0 • Hayward, CA distribution center Database Servers: Two • Farmington, CT distribution center Personalization: Proprietary application • Atlanta, GA distribution center Affiliate Management: Not used • Lees Summit, MO distribution center Payment Processing: Not used • Mechanicsville, VA distribution center • Richmond, VA distribution center OPERATING BENCHMARKS • Cary, NC corporate offices Total Revenue • Toronto, Ontario Canadian headquarters 1999...... $5.189bn 1998...... $4.551bn • Two distribution centers in Canada 1997...... $4.048bn Telecenter: None Ownership: Public Registered Users (end of period) Trading Symbol: MSEL (NASDAQ) 1999...... 40,000 Major Shareholders: n/a 1998...... 26,000 Equity Capital: $95.173 million 1997...... 21,000 Profitable: No ($61.168 million loss for FY ’99) COMMENTS WEBSITE INFORMATION Merisel is a leading distributor of computer hardware Website: www.merisel.com and software, serving more than 30,000 resellers in the Launch Date: November 1996 (commerce-enabled) U.S. and Canada. The company distributes more than Site Type: Business-to-business 35,000 products from manufacturers such as Apple, Business Model: Fixed pricing Compaq, Hewlett-Packard, IBM/Lotus, Intel, Microsoft, Site Size: 35,000 (approx.) product SKUs 3Com, Sun Microsystems and Symantec. Languages: English The company’s website provides access to technical Accepts Advertising: Yes product information, links to 350+ manufacturers, news on Site Features: General help, one click ordering/quick buy daily product promotions and announcements, and Back-end Integration: Access to customer account downloadable return-authorization and system-return information, inventory availability, order processing, order forms. The site also provides a web front-end to the status, and shipment tracking are integrated into website. company’s SELline II electronic catalog and ordering system, enabling real-time access to contract pricing MARKETING information, credit availability information, product Media: Business periodical advertising, direct mail availability, and ordering options. Customer and inventory Partnerships: None data are retrieved through real-time links to the company’s Affiliates Program: None SAP R/3 ERP system.

Between April and December 1999, the company reports that orders placed via SELline II -- through both MVP.com, Inc. EDI and web interfaces -- increased over 400 percent and 111 East Wacker Drive, Suite 600 the Web/SELline traffic alone increased by 83% to 12.7 Chicago, IL 60601, U.S.A. million "hits" per month. For all of 1999, more than 55% Tel. 312-596-4444 percent of the company’s orders were processed electronically. Fax 312-596-4445

Unique Visitors (March 2000): 408,000 Reach: 0.6% Rank: 1,821

ORGANIZATION Business Sector: Sporting goods Founded: October 1999 Employees: 120+ Offline Activity Storefronts: None Catalogs Mailed: None Facilities: Chicago, IL headquarters Telecenter: In-house call center with 25+ representatives Ownership: Private Trading Symbol: None Major Shareholders: • Benchmark Capital • Freeman Spogli • Galyan’s Trading Company • SportsLine.com Inc. • CBS Corp. Financing: $65 million in one round plus $85 million in bartered advertising from CBS Corp. Profitable: No

WEBSITE OVERVIEW Website: www.mvp.com Site Launch: January 2000 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 40,000 (approx.) product SKUs from 500 brands Languages: English Accepts Advertising: No Site Features: General help Back-end Integration: Access to customer account information, order history, order processing, order status, and shipment tracking are integrated into website.

MARKETING Media: Television advertising, newspaper advertising Partnerships: • America Online (proprietary dial-up service) • America Online (www.aol.com) • America Online (www.netscape.com) • America Online (www.compuserve.com) • SportsLine.com Inc. (www.sportsline.com)

114 copyright  2000 by The Intermarket Group The eCommerce Almanac

MVP.com Home Page Elway, Michael Jordan and Wayne Gretzky in partnership with John Costello, former president of AutoNation and senior executive vice president of Sears, Roebuck & Co. The company received financial backing from Benchmark Capital and Freeman Spogli. Order fulfillment is outsourced through a partnership with Galyan’s Trading Company, an outdoor and sporting goods retailer with 20 stores in nine states and a unit of The Limited Inc. (NYSE: LTD). The partnership also provides for the company to be featured in Galyan advertising, MVP.com ordering kiosks placed in Galyan stores, and enables MVP.com customers to return or exchange their purchases at Galyan stores. The company announced an agreement in December • VarsityBooks.com (www.varsitybooks.com) 1999 to acquire and operate the co-branded online • ZuluSports.com (www.zulusports.com) storefronts of SportsLine.com. The SportsLine.com • International Hockey League storefronts generated $16.5 million in gross revenue during Affiliates Program: MVP.com Affiliate Program 1999, up from $3.6 million in 1998. The company also Number of Affiliates: n/a entered into a media partnership in which SportsLine.com Commission Rate: 5-10% of order value based on will receive $120 million in guaranteed cash payments total monthly sales over a 10-year period and an equity interest in MVP.com while MVP.com will receive $85 million in advertising MANAGEMENT and promotion on CBS Corp. properties over a four year John Costello, Chief Executive Officer period in exchange for an equity stake. Ian Drury, Vice President and Chief Technology Officer Stuart Feddersen, Vice President of Technology and Operations Mary Slayton, Vice President and Chief Marketing Officer Brent Hill, Vice President-Business Development Michael Beckerman, Vice President-International Andrew Ferraro, Vice President-Fulfillment and Customer Support

INTERNET INFRASTRUCTURE Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: InterNAP Network Services Internet Connectivity: One DS-3 line Mirror Locations: None Hardware Platform: Compaq ProLiant Operating System: Windows NT 4, Windows 2000 Web Server Software: Microsoft IIS 4.0 and IIS 5.0 Commerce Platform: Microsoft Site Server Commerce Edition Database Platform: Microsoft SQL Server Personalization: Not used Affiliate Management: LinkShare Payment Processing: n/a Other Applications: Online Opinion O-Metrics, NetGenesis Net.Analysis

COMMENTS MVP.com is an online retailer of outdoor and sporting goods. The company was founded by sports stars John

NetB@nk NetB@nk Home Page Royal Centre Three, Suite 100 11475 Great Oaks Way Alpharetta, GA 30022, U.S.A. Tel. 770-343-6006

Unique Visitors (March 2000): 857,000 Reach: 1.3% Rank: 837

ORGANIZATION Business Sector: Banking and financial services Founded: February 1996 Employees: 82 Offline Activity Storefronts: None • Catalogs mailed: None Armed Forces Financial Network (www.affn.org) • Facilities: Atlanta headquarters Microsoft Corp. (moneycentral.msn.com) • Telecenter: One call center outsourced to TeleTech for Yahoo! Inc. (www.yahoo.com) level one service and one in-house call center with 45 Affiliates program: None representatives. Ownership: Public MANAGEMENT Trading symbol: NTBK (NASDAQ) T. Stephen Johnson, Chairman. President of TSJ&A, a Major shareholders: bank consulting firm specializing in mergers, acquisitions • Carolina First Bank and regulatory consulting. Previously served in a Shareholder Equity: $238.421 million management capacity for two large Atlanta banks before Profitable: Yes ($3.048 million profit for FY ’99) forming TSJ&A in 1987. D.R. Grimes, Vice Chairman and Chief Executive Officer. WEBSITE OVERVIEW Served as an independent management consultant before Website: www.netbank.com joining NetB@nk, and prior to that in various positions Site Launch: October 1996 with Servantis Systems, Inc., including Executive Vice Site Type: Business-to-Consumer President of Technology and Chief Information Officer, Business Model: Fee-Based Executive Vice President of Technology and Marketing, Site Size: Checking, Bill Payment, Bill Presentment, President, Treasury Products Division, and President, IRAs, CDs, Credit Cards, Mortgages, Home Equity Loans, Financial Products Division. Insurance, Brokerage Services Michael R. Fitzgerald, Director, President, formerly Languages: English served as President of directbanking.com, the electronic Accepts Advertising: No banking division of Salem Five Cents Savings Bank. His Site Features: General help, contextual help, IP telephony; 20-year career in banking, and most recently online Online real-time customer service is planned banking, was initiated at Merchants National Bank. Back-end Integration: Access to customer account Robert E. Bowers, Chief Financial Officer. Previously information, transaction history, payment processing, and served as CFO of CheckFree Corp. and prior to that as a trader status integrated into website. CFO and Director of Servantis Systems, Inc. Thomas L. Cable, Chief Technology Officer. Previously MARKETING served as Vice President, Retail Financial Services of Media: Radio advertising, newspaper advertising, CheckFree Corp. and prior to that in various capacities consumer and business periodical advertising, direct mail with Servantis Systems, Inc., including Senior Vice Partnerships/Alliances: President and Business Unit Manager for Home Banking • America Online (proprietary dial-up service) Products and Services, Vice President and Product Manager for Delivery Systems and Associate and Product • America Online (www.aol.com) Manager for the company’s licensed bill payment software • America Online (www.compuserve.com) product. • America Online (www.netscape.com) • America Online (www.digitalcity.com)

116 copyright  2000 by The Intermarket Group The eCommerce Almanac

INTERNET INFRASTRUCTURE An average 5,300 net customer accounts were opened by Design Consultants: None the company each month during the first quarter of 2000, Site Maintenance: In-house Staff up from 4,083 in the fourth quarter of 1999. Hosting Arrangement: Co-Located server(s) The company’s business was originally operated as a Access Provider: PSINet service of Carolina First Bank and became an independent Internet Connectivity: One DS-3 line organization after a July 1997 initial public offering (IPO). Mirror Locations: None The company operated under the name Atlanta Internet Hardware Platform: Sun Microsystems, NCR Bank up until the third quarter of 1998 when it changed to Operating System: Solaris, Windows NT NetB@nk. Web Server Software: Netscape Enterprise Server NetB@nk offers a variety of services which are Commerce Platform: Edify Electronic Banking System delivered by both the company itself as well as through Web Servers: 16 third party partnerships. Banking products and services Application Servers: 4 include checking and money market accounts, certificates Database Platform: Oracle of deposit, Individual Retirement Accounts, electronic bill Database Servers: n/a payment, debit cards, credit cards, mortgage loans, Personalization: Edify Electronic Banking System business equipment leases, securities brokerage services, Affiliate Management: Not used home equity lines, and electronic document and image Payment Processing: CheckFree Bill Payment Services, storage in “Virtual Safe Deposit Boxes.” BISYS The company’s investment and securities brokerage Other Applications: Edify Electronic Workforce, Deluxe services are delivered through a partnership with UVEST ONE for the Internet online check preview and ordering Investment Services. Mortgage loan processing services system are provided through a partnership with mortgage.com while home equity lines and second mortgages are OPERATING BENCHMARKS originated and serviced for the company by PNC Bank Total Revenue Corp. In October 1998, the bank established a partnership 1999...... $56.432mn with Republic Leasing Company that enables customers to 1998...... $18.771mn lease small business equipment from Republic Leasing 1997...... $ 2.286mn through NetB@nk. A web-based loan center for the company’s e.card-enabled VISA credit card is operated in Total Accounts (end of period) partnership with First USA. 1999...... 65,955 The company recently announced plans to offer by mid- 1998...... 17,408 year 2000 a NetB@nk Financial Network service which 1997...... 4,750 provides customers “one-click" access to their personal and business account information from multiple banks, Total Deposits (end of period) brokers, credit card companies, and mortgage companies 1999...... $653.9mn from a single personalized page on the NetB@nk website. 1998...... $283.6mn During 2000, the company also plans to add wireless 1997...... $ 58.7mn services, insurance related products, bill presentment services, and expanded securities brokerage services. Marketing Expenditures 1999...... $7.358mn 1998...... $0.695mn 1997...... $0.525mn

Data Processing Expenditures 1999...... $1.395mn 1998...... $0.316mn 1997...... $0.539mn

COMMENTS NetB@ank is the largest federally-insured bank operating exclusively on the internet. The company’s total assets stood at $1.4 billion and total accounts reached 82,000 at the end of the first quarter of 2000 (March 31).

NetGrocer Inc. NetGrocer Home Page 1112 Corporate Road North Brunswick, NJ 08902, U.S.A. Tel. 732-745-1000 Fax: 732-745-0026

Unique Visitors (March 2000): 635,000 Reach: 0.9% Rank: 1,129

ORGANIZATION Business Sector: Groceries Founded: October 1995 Employees: 63 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: New Brunswick, NJ headquarters and distribution facility Telecenter: In-house call center Ownership: Private Trading Symbol: None Major Shareholders: • Uri Evan, Founder (16%) • • Parmalat SPA (22%) Netmarket Group (www.netmarket.com) • • Cendant Internet Group (27%) Network Commerce Inc. (www.shopnow.com) • Financing: $45 million Yahoo! Inc. (www.yahoo.com) Profitable: No Affiliates Program: NetGrocer Affiliate Program Number of Affiliates: n/a WEBSITE OVERVIEW Commission Rate: 5% of order value Website: www.netgrocer.com Site Launch: July 1997 MANAGEMENT Site Type: Business-to-consumer James Chambers, Chairman and Chief Executive Officer Business Model: Fixed pricing Fred Horowitz, President Site Size: 9,500+ product SKUs Richard Falcone, Executive Vice President and Chief Languages: English Financial Officer Accepts Advertising: No Ari Sabah, Chief Information Officer Site Features: General help Stephen Johann, Vice President, Consumer Direct Back-end Integration: Access to customer account information, order history, inventory availability, order INTERNET INFRASTRUCTURE status, and shipment tracking are integrated into website. Design Consultants: None Site Maintenance: In-house staff MARKETING Hosting Arrangement: Co-located server(s) Media: No off-line media used Access Provider: Network Plus/InfoHouse Partnerships: Internet Connectivity: One DS-3 line • Big Planet (www.bigplanet.com) Mirror Locations: None Hardware Platform: Compaq ProLiant • CollegeClub.com (www.collegeclub.com) Operating System: Windows NT 4 • CyberGold Inc. (www.cybergold.com) Web Server Software: Microsoft IIS 4.0 • EarthLink Inc. (www.wizshop.com) • Commerce Platform: Proprietary Cold Fusion applications Foodvision.com (www.foodvision.com) Web Servers: 15 Compaq ProLiant 5000, ProLiant 2500, • Inktomi Corp. (Inktomi Shopping Engine) and ProLiant 850R servers • Intuit Inc. (www.quicken.com) Database Platform: Microsoft SQL Server 7.0 • MyWay.com (www.myway.com) Database Servers: Two Personalization: Proprietary application

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Affiliate Management: Proprietary Cold Fusion application Other Applications: Aditi Corp. Talisma e-mail NextCard, Inc. management software, Intell-A-Check direct-debit service, 595 Market Street, Suite 1800 CyberCash InstaBuy San Francisco, CA 94105, U.S.A. Telephone: 415-836-9700 OPERATING BENCHMARKS Total Customers (est. at end of period) Unique Visitors (March 2000): 3,903,000 1999...... 200,000 Reach: 5.8% 1998...... 55,000 Rank: 97 1997...... 7,000

COMMENTS ORGANIZATION NetGrocer is an online supermarket that offers “dry Business Sector: Financial services groceries” and related consumer products which are Founded: June 1996 shipped nationwide to customers’ homes and offices. All Employees: 365 orders are packaged at the company's New Jersey Offline Activity: distribution center and the majority are shipped via FedEx. Storefronts: None Approximately 60% of orders are shipped within the Catalogs Mailed: None Northeastern corridor, 22% are shipped to the Midwest, Facilities: • and the balance go to the West Coast. The company’s San Francisco, CA headquarters average order is approximately $74.00. • San Ramon, CA operations center The company believes that because its business model • Phoenix, AZ call center is based around the delivery of non-perishable products to • London, UK international branch customers via Federal Express, it can easily expand into Telecenter: Two in-house call centers in San Ramon, CA international markets in Europe, Latin America, Asia and and Phoenix, AZ with 100+ representatives and after-hours Australia with the participation of local financial and support out-sourced to First Data Corp. strategic partners Ownership: Public In February 1999, the company modified its business Trading Symbol: NXCD (NASDAQ) strategy by embracing a “super center” approach and Major Shareholders: redesigning its site to add a drugstore, a general store, and • Jeremy Lent, CEO a solutions-focused store to the existing grocery store. The • Brentwood Venture Capital solutions store aggregates products around common • Moore Capital Management themes, such as a new baby, pet care, or setting-up a home • Kleiner Perkins Caufield & Byers office. Since its launch, the general store has been • Forrest Binkley & Brown expanded to include entertainment products, housewares, • Trinity Ventures toys, home office and school supplies, pet supplies, and • St. Paul Venture Capital gifts. • Sequoia Capital The company generated an estimated $5 million in sales Financing: $384.47 million in four rounds, IPO and during 1999. In March 2000, Parmalat SpA a multi- secondary offering national Milan-based food company, purchased a 22% Profitable: No ($77.195 million loss for FY ’99) equity stake in NetGrocer for $30 million in new capital. WEBSITE OVERVIEW Website: www.nextcard.com Site Launch: December 1997 Site Type: Business-to-consumer Business Model: Fee-based Site Size: One service Accepts Advertising: No Site Features: General help, contextual help, online real- time customer service Back-end Integration: Access to customer account information, transaction processing, transaction status, and transaction history are integrated into website.

NextCard Home Page Steve Rubinow, Chief Information Officer. Previously served as CIO for AdKnowledge, vice president of corporate management information systems at Fidelity Investments, vice president of market planning at Budget Rent a Car, and director of decision support services at the Quaker Oats Company. M.S. in Computer Science from DePaul University, Ph.D. in Chemistry from the University of Illinois, and M.B.A. from the University of Illinois. Molly Lent, Chief Corporate Development Officer. Previously served as president of Art Forms, an art distribution company. B.A. from State University of New York at Buffalo. Daniel D. Springer, Chief Marketing Officer. Previously served as a consultant with McKinsey & Company. B.A. from Occidental College and M.B.A. from Harvard University. MARKETING Bruce Rigione, Senior Vice President, Business Media: Radio and television advertising, consumer Development. Previously served as a private consultant, periodical advertising as a managing director and global head of asset Partnerships: securitization for HSBC Markets, and as a managing • Amazon.com Inc. (www.amazon.com) director and head of securitization for Chase Securities. • ChipShot.com (www.chipshot.com) B.A. from Fairfield University and M.B.A. from Columbia • ebates.com (www.ebates.com) University. • eGroups Inc. (www.onelist.com) Yinzi Cai, Senior Vice President, Decision Analytics. Previously served as a principal in the Finance Industry • E-Loan Inc. (www.eloan.com) Group of American Management Systems, and as a risk • Flooz.com Inc. (www.flooz.com) • manager for GE Capital. B.S. from Fudan University and Hoovers Inc. (www.hoovers.com) M.S. from Case Western Reserve University. • InsWeb Corp. (www.insweb.com) Shaun Deane, Vice President, Project Integration and • The Knot (www.theknot.com) Planning. Previously founded and served as vice president • MapQuest.com Inc. (www.mapquest.com) of the New Media Products Group at educational publisher • Planet Out (www.planetout.com) Addison-Wesley Longman and in a variety of positions at • Priceline.com Inc. (www.priceline.com) Apple Computer, including director of its Evangelism • Travelscape.com (www.travelscape.com) Group. B.A. from Brandeis University and M.A. from the • United Media (www.dilbert.com) University of San Francisco. • USA Today Online (www.usatoday.com) Mike Angiletta, Manager - NextCard Affiliate Network • Weather Channel (www.weather.com) Affiliates Program: NextCard Affiliate Network INTERNET INFRASTRUCTURE No. of Affiliates: 40,000 Design Consultants: First Data Corp. Commission Rate: $20.00 per new account Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) MANAGEMENT Access Provider: Exodus Communications; customer Jeremy R. Lent, Chairman and Chief Executive Officer. account server(s) co-located at First Data data center Previously served as senior vice president and as chief Mirror Locations: None financial officer of Providian Bancorp. B.A. and M.A. Hardware Platform: Dell Computer from Cambridge University and M.B.A. from the Operating System: Windows NT 4 University of Chicago. Web Server Software: Microsoft IIS 4.0 Timothy J. Coltrell, Chief Operating Officer. Previously Commerce Platform: Proprietary Java applications served as president and CEO of GE Capital Consumer Web Servers: 30+ total Dell PowerEdge 2300 servers Credit Card Company and in a variety of positions at Database Platform: Microsoft SQL Server 7.0, Oracle Providian Bancorp, including assistant vice president of Database Servers: See “Web Servers” above collections, vice president of acquisitions, and vice Personalization: Not used president of risk control. B.A. and M.B.A. from the Affiliate Management: Commission Junction University of California at Irvine. Transaction Processing: Proprietary applications

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Other Applications: eShare Technologies online customer In February 1999, the company announced an service, ART Technology Dynamo Application Server, agreement with Flooz.com that provides for a variety of Resonate load balancing software, SAS Institute data cross-marketing initiatives and for NextCard to integrate analysis software, Mercury WinRunner and LoadRunner the Flooz.com online gift currency into its e-commerce platform; as part of the agreement, the company purchased OPERATING BENCHMARKS a minority stake in Flooz.com. The company also acquired Total Revenue PayTrust, an online bill payment service, in the first 1999...... $26.56mn quarter of 2000. PayTrust will be used as a platform to 1998...... $ 1.20mn offer online bill payment services to cardholders. 1997...... $ 0.09mn

Marketing Expenditures 1999...... $24.65mn 1998...... $ 4.32mn 1997...... $ 0.05mn

Development Expenditures 1999...... $22.05mn 1998...... $ 0.50mn 1997...... $ 0.09mn

Total Accounts (end of period) 1999...... 220,000 1998...... 40,000 1997...... 0

COMMENTS NextCard is an Internet-based credit card issuer. The company offers its own NextCard Visa card as well as affinity Visa cards through partnerships with companies such as Amazon.com, priceline.com, ebates.com, MyPoints.com, Flooz.com, and United Media’s Dilbert cartoon strip. Gross revenue for the first quarter ending March 31, 2000 was $31.02 million with a loss of $17.7 million. Total accounts reached 337,000 at the end of the quarter. The company was originally founded as Internet Access Financial Corp. and changed its name to NextCard Inc. in October 1998. Between December 1997 and September 1999, NextCard Visa cards were issued exclusively through a profit and loss sharing partnership with Heritage Bank of Commerce. In September 1999, the company acquired Textron National Bank, which was subsequently renamed NextBank. Since the acquisition of Textron, the company has originated accounts on its own behalf through NextBank. The company offers its NextCard Visa card within the context of a broader e-commerce platform. Cardholders are provided access to online account reporting and management services, a NextCard Concierge electronic wallet software which simplifies online shopping, a GoShopping! online shopping portal -- created in partnership with Epinions, Flooz.com, and BizRate.com -- and a NextCard Rewards which provides reward points based on spending and balance transfer activity.

Partnerships: OfficeDepot.com • America Online (proprietary dial-up service) Office Depot, Inc. • America Online (www.aol.com) 818 Mission Street, Fourth Floor • America Online (www.netscape.com) San Francisco, CA 94103, U.S.A. • America Online (www.compuserve.com) Tel. 415-974-1000 • America Online (www.digitalcities.com) • ChamberBiz (www.chamberbiz.com) • Unique Visitors (March 2000): 715,000 Chase Manhattan/Chase.com (www.chase.com) Reach: 1.1% • Intelisys Electronic Commerce (IEC Portal service) Rank: 1,020 • Intuit Inc. (www.quicken.com) • Oracle Corp. (Oracle Exchange) ORGANIZATION • PurchasePro (www.purchasepro.com) Business Sector: Office supplies • iVillage, Inc. (www.ivillage.com) Founded: 1986 Affiliates Program: None Employees: 48,000 total Offline Activity MANAGEMENT Storefronts: 798 U.S., 70 International William Seltzer, Executive Vice President Information Catalogs Mailed: 296 million Systems and Chief Information Officer Facilities: Monica Luechtefeld, Senior Vice President of E- • Delray Beach, FL headquarters and data center Commerce • San Francisco, CA officedepot.com office Joan Broughton, Director of Web Publishing • Torrance, CA Viking Office Products office Francis Juliano, Director of Product Development and • Charlotte, NC data center Technology • 30 distribution facilities in 18 states INTERNET INFRASTRUCTURE • 17 international distribution facilities in 10 countries Design Consultants: None • 60 regional sales offices Site Maintenance: In-house staff Telecenter: Seven in-house U.S. call centers with 1,000+ Hosting Arrangement: On-site server(s) customer account managers; 14 international call centers Access Provider: MCI Telecommunications Corp., Ownership: Public IBM Corp. Trading Symbol: ODP (NYSE) Internet Connectivity: Multiple shared DS-3 lines Major Shareholders: n/a Mirror Locations: None Shareholder Equity: $1.876 billion Hardware Platform: Compaq Computer Profitable: Yes ($257.638 million profit for FY ’99) Operating System: Windows NT 4 Web Server Software: Microsoft IIS 4.0 WEBSITE OVERVIEW Commerce Platform: Microsoft Site Server Commerce Website: www.officedepot.com Edition Site Launch: January 1998 Web Servers: Multiple Compaq AlphaServers Site Version: 5.0 Database Platform: Microsoft SQL Server 7.0 Site Type: Business-to-business Database Servers: Multiple Compaq AlphaServers; real- Business Model: Fixed pricing time links to IBM AS/400 legacy system via proprietary Site Size: 7,000+ products plus ability to order any catalog messaging layer item by product number Personalization: Microsoft Site Server Commerce Edition Languages: English Affiliate Management: Not used Accepts Advertising: No Payment Processing: Proprietary application; links to Site Features: General help; foreign language product chain-wide POS system and AVS information and order pages are planned. Other Applications: GroupOne AVS, Microsoft Visual Back-end Integration: Access to customer account InterDev and SourceSafe, AskJeeves search, NCR information, order history, inventory availability, order Teradata retailDecisions, Kana eBusiness System processing, payment processing, order status, and order tracking are integrated into website. OPERATING BENCHMARKS Total Revenue MARKETING 1999...... $10.263bn Media: Radio and television advertising, newspaper 1998...... $8.998bn advertising, business periodical advertising, direct mail 1997...... $8.100bn

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OfficeDepot.com Home Page its larger customers in 1996 through individually customized websites. The public site was launched in 1998 for individuals and small businesses. The Office Depot website is integrated into the mainframe systems which support the company’s bricks-and-mortar operations. All online orders, as well as orders received through the call centers by telephone or by fax, are electronically routed over the Internet to the store or distribution facility closest to the customer for pick-up or delivery. Customers can use the website to look at inventory availability in both the local store as well as the closest distribution center and to track orders regardless of the channel used to place them. Online sales from all sources for the first quarter ending March 25, 2000 were $171.6 million compared to $50.4 million in the same quarter of 1999. The company expects to do upwards of $1 billion in online sales during 2000 and $3-4 billion by 2004. The company has partnered with several firms to offer its online customers business services from Stamps.com, ELetter, DigitalWork, Intuit, WebsitePros, Art.com, PurchasePro.com, and Jintek/ScheduleOnline. In 1998, the company acquired Viking Office Products. Office Depot intends to leverage Viking’s international sales infrastructure to expand its online sales outside of the U.S. Viking operates an online storefront at www.vikingop.com and international sites where launched for Germany in February 1999 and for the U.K. and the Netherlands in March 1999. An additional ten international sites are planned for 2000. The company has endorsed the Digital Receipt Alliance standard for XML-based digital receipts proposed by NCR Corp. and backed by Visa International, Microsoft, AOL, and HP's VeriFone division. It is also a supporter of the OBI protocol. In October 1999, the company announced an equity investment in PurchasePro.com and a strategic alliance in which the two companies will cross-market to each other’s Online Sales customers and will jointly create an online marketplace 1999...... $349.7mn targeting small and medium-sized businesses. In the first 1998...... $ 66.5mn quarter of 2000, the company invested $10 million in three 1997...... n/a additional companies: Bigstep.com, which provides a free integrated suite of e-business services to the small Total Advertising Expenditures office/home office market; Cellmania.com, which provides 1999...... $285.3mn web-based cellular telephone appliances and services; and 1998...... $230.8mn 2Wire, which provides a residential business-to-business 1997...... $201.8mn Internet gateway service to home-based workers. In May 2000, the company announced a five-year, $44 Online Customer Accounts (end of period) million marketing partnership with America Online. 1999...... 292,000 Office Depot will be promoted across all of AOL’s 1998...... 42,000 properties and the two companies will develop a co- 1997...... n/a branded business with content, services, and business products for small business customers. The partnership COMMENTS will also providing AOL with visibility across Office Office Depot is the largest retailer of office products in Depot’s various sales channels, including its retail stores, the U.S. The company began offering online purchasing to website, and its national advertising.

• Excite, Inc. (www.excite.com) OfficeMax.com • Gateway Computer (icon on Gateway PCs) OfficeMax Inc. • Inktomi Corp. (Inktomi Shopping Engine) 3605 Warrensville Center Road • Lycos, Inc. (www.lycos.com) Shaker Heights, OH 44122, U.S.A. • Lycos, Inc. (www.tripod.com) Tel. 216-471-6900 • Microsoft Corp. (plaza.msn.com) Fax 216-471-4040 • Netcentives, Inc. (www.netcentives.com) • OneCore.com (www.onecore.com) • Unique Visitors (March 2000): 794,000 Winstar Communications Inc. (www.office.com) Reach: 1.2% Affiliates Program: OfficeMax.com Affiliate Program Rank: 910 Number of Affiliates: n/a Commission Rate: 4-10% tiered ORGANIZATION MANAGEMENT Business Sector: Office supplies Ryan Vero, Vice President-OfficeMax.com Founded: 1988 Employees: 41,000 total (100+ interactive staff) INTERNET INFRASTRUCTURE Offline Activity Outside Consultants: Digital Boardwalk Storefronts: 971 Site Maintenance: In-house staff Catalogs Mailed: n/a Hosting Arrangement: Co-located server(s) Facilities: Access Provider: Exodus Communications • Shaker Heights, OH headquarters Internet Connectivity: Multiple DS-3 lines • 19 fulfillment centers across U.S. Mirror Locations: None • 2 PowerMax Distribution Centers in U.S. Hardware Platform: Sun Microsystems Telecenter: In-house call centers in Cleveland, OH and Operating System: Solaris UNIX Dallas, TX Web Server Software: Netscape Enterprise Server 3.6 Ownership: Public Commerce Platform: Broadvision One-to-One Trading Symbol: OMX (NYSE) Web Servers: Multiple Sun servers Major Shareholders: n/a Database Platform: Oracle Shareholder Equity: $1.1 billion Database Servers: Sun/EMC Profitable: Yes ($10.041 million profit for FY ’99; Personalization: Proprietary application; BroadVision OfficeMax.com segment reported $3.906 million loss for One-to-One FY ’99) Affiliate Management: LinkShare Payment Processing: Proprietary application WEBSITE OVERVIEW Other Applications: Microsoft Passport, RedCart Website: www.officemax.com Universal Shopping Cart Site Launch: March 1995 Site Type: Business-to-business OPERATING BENCHMARKS Business Model: Fixed pricing Total Revenue1 Site Size: 25,000+ product SKUs plus 17,000+ 2000...... $4.843bn downloadable software titles 1999...... $4.338bn Languages: English, Spanish (officemax.com.mx), 1998...... $3.765bn Japanese (officemax.co.jp) Accepts Advertising: No Online Sales1 Site Features: General help, contextual help 2000...... $40.2mn Back-end Integration: Access to customer account 1999...... $ 6.3mn information, order history, inventory availability, order and 1998...... $ 1.0mn payment processing, order status, and shipment tracking are integrated into website 1. Fiscal year ending January 22.

MARKETING COMMENTS Media: Television and radio advertising, consumer and OfficeMax.com is the Internet marketing division of business periodical advertising, direct mail OfficeMax Inc. OfficeMax Inc is currently organized into Partnerships: three business segments: a Core Business Segment that • Amazon.com Inc. (www.zshops.com) encompasses the company’s retail stores, call centers, and • America Online Inc. (Proprietary dial-up service) outside sales force; a Computer Business Segment which

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OfficeMax.com Home Page 1-800-FLOWERS, Inc. 1600 Stewart Avenue Westbury, NY 11590, U.S.A. Tel. 516-237-6000 Fax 516-237-6060

Unique Visitors (March 2000): 995,000 Reach: 1.5% Rank: 675

ORGANIZATION Business Sector: Gifts Founded: 1987 Employees: 2,100 total (25 interactive staff) Offline Activity Storefronts: 36 company-owned, 87 franchised, and 2,000 (approx.) Partner Florists Catalogs Mailed: 36 million (FY ’99) Facilities: • Westbury, NY headquarters • Madison, VA distribution and service center • Phoenix, AZ distribution and service center • Denver, CO distribution center • Westbury, NY customer service center • Bethpage, NY customer service center • Marietta, GA customer service center • San Antonio, TX customer service center Telecenter: Six in-house call centers Ownership: Public is focused on in-store computer hardware and software Trading Symbol: FLWS sales; and the OfficeMax.com Segment. Although Major Shareholders: OfficeMax.com is currently managed as a division within • James McCann, Chairman and CEO OfficeMax Inc., the company announced plans in • Chase Venture Capital Associates December 1999 to evaluate alternate organizational • strategies, including issuing a tracking stock for the Benchmark Capital Partners • Internet unit or even spinning it off in an IPO. SOFTBANK America • The OfficeMax.com unit leverages the parent Waelinvest S.A company’s existing infrastructure, which includes 21 Financing: $239.7 million from two rounds and IPO delivery centers across the U.S. and two national call Profitable: No ($53.92 million loss for nine months ended centers. The unit also piggybacks on OfficeMax Inc.’s 3/26/00) advertising and marketing programs which spent more than $123 million during 1999 net of vendor WEBSITE OVERVIEW reimbursements. Online sales were $26.13 million for the Website: www.1800flowers.com, www.800flowers.com first quarter ending April 22, 2000, up from $4.43 million Site Launch: April 1995 in the same quarter of 1999, with a loss of $7.36 million. Site Type: Business-to-consumer, business-to-business The Internet infrastructure of OfficeMax.com is Business Model: Fixed pricing substantially autonomous, although transaction processing Site Size: 1,500 plants and floral arrangements, 6,000 systems are integrated into the parent’s SAP/R3 ERP (approx.) gift product SKUs system for order management, payment processing, Languages: English, Spanish distribution, accounting and financial systems. Accepts Advertising: No Site Features: General help, online real-time customer service, foreign language product information and order pages

1-800-FLOWERS Home Page • Microsoft Corp. (www.msn.com) • NBC Internet (www.snap.com) • StarMedia Network (www.starmedia.com) • Virtual Emporium (www.virtualemporium.com) • United Airlines • American Airlines • Delta Airlines • American Express • VISA • MasterCard Affiliates Program: 1-800-Flowers.com Commission+ Affiliate Network Number of Affiliates: 14,000 Commission Rate: 6-8% based on aggregate monthly order value

MANAGEMENT James McCann, Chairman and Chief Executive Officer Christopher McCann, Senior Vice President T. Guy Minetti, Senior Vice President, Corporate Development Jerry Noonan, Senior Vice President and Chief Marketing Officer Jeffry Borror, Senior Vice President and Chief Technology Officer Donna Iucolano, Senior Vice President, Interactive Services Joe Hage, Vice President of Marketing Norman Dee, Director of Planning and Web Strategies

INTERNET INFRASTRUCTURE Back-end Integration: Access to customer account Design Consultants: Fry Multimedia Inc. information, order history, order processing, and payment Site Maintenance: In-house staff and outside consultant processing are integrated into website. Hosting Arrangement: Co-located server(s) Access Provider: UUNET/MCI Worldcom, Exodus MARKETING Communications Media: Radio and television advertising, consumer and Mirror Locations: One business periodical advertising, direct mail Hardware Platform: Intel Pentium, Sun Microsystems Partnerships: Operating System: Windows NT, Solaris (BloomLink) • America Online (Proprietary dial-up service) Web Server Software: Microsoft IIS, Netscape Enterprise • America Online (www.aol.com) Server 3.6 (BloomLink) • America Online (www.netscape.com) Commerce Platform: Microsoft Site Server Commerce • America Online (www.compuserve.com) Edition • America Online (www.digitalcity.com) Web Servers: Multiple Pentium servers, two Sun Ultra 2 • America Online (ICQ service) servers (BloomLink) • Amazon.com Inc. (www.amazon.com) Application Servers: Two Compaq 2500 servers (BloomLink) • BarnesandNoble.com (www.barnesandnoble.com) Database Platform: Microsoft SQL Server, Oracle • Dawson's Desktop (www.dawsonsdesktop.com) • (BloomLink) Excite@Home (www.excite.com) Database Servers: Two Sun Ultra 2 servers (BloomLink) • GiftCertificates.com (www.giftcertificates.com) Personalization: Microsoft Site Server Commerce Edition, • GiftPoint.com (www.giftpoint.com) proprietary applications • iParty Corp. (www.iparty.com) Affiliate Management: LinkShare • Inflightonline.com (www Inflightonline.com) Payment Processing: Signio, OrderTrust, Achex Payment Service

126 copyright  2000 by The Intermarket Group The eCommerce Almanac

Other Applications: RedCart Universal Shopping Cart, to process web site orders as well as orders from the call Prime Response PrimeVantage marketing software, iPivot centers, fax, and America Online. Fulfillment partners are load balancing software, eShare Technologies NetAgent, able to log-in to BloomLink, access orders, download Kana Solution customer support information to their point-of-sale system, and process other database-intensive information. BloomLink also supports OPERATING BENCHMARKS user editable dealer home pages, special interest chat Total Revenue1 sessions with floral and small business experts, and an e- 1999...... $295.9mn commerce application for dealer supplies. 1998...... $220.6mn In November 1999, the Company acquired 1997...... $186.4mn GreatFood.com, an online retailer of specialty and gourmet food products for approximately $18.7 million in cash. Online Sales1 The company also inked a partnership the same month 1999...... $52.89mn with Fulton Street Lobster and Seafood Company to add a 1998...... $26.75mn gourmet storefront to the 1-800-FLOWERS website 1997...... $16.09mn offering lobster, seafood and aged porterhouse steaks beginning in December 1999. Marketing Expenditures1 1999...... $92.15mn 1998...... $55.42mn 1997...... $47.46mn

Technology and Development Expenditures1 1999...... $8.07mn 1998...... $1.79mn 1997...... $1.41mn

Total Customers (end of period) 1999...... 7.8mn 1998...... 6.5mn 1997...... n/a

1. Fiscal year ending June

COMMENTS 1-800-FLOWERS was already selling millions of dollars worth of flowers in 1995 when it launched its first online storefront. Sales from the online channel have increased from 8.6% of total sales in FY 1997 to 17.9% in 1999. Cumulative online customers have expanded from 400,000 at the end of FY 1998 to 700,000 in 1999. During the first nine months of FY 2000 (6/28/99 to 3/26/00), online revenues totaled $71 million, representing a 135% increase over the comparable period last year, and the number of online customers exceeded 1.8 million. Many customers also place orders through multiple channels; the company reports more than one million customers placed orders during the most recent quarter (Jan. 1, 2000 to March 26, 2000), approximately 40 percent were repeat customers and more than 25 percent of the repeat customers placed their orders both online and by telephone. A majority of orders processed by the company are fulfilled through its BloomNet network of independent florists or one of its own retail stores. The company has developed an extranet called BloomLink that leverages its website infrastructure and connects the company to many of its fulfillment partners. The BloomLink extranet is used

OneCore.com OneCore.com Home Page 5 Oak Park Drive Bedford, MA 01730, U.S.A. Tel. 781-275-5900 Fax 781-275-7797

Unique Visitors (March 2000): n/a Reach: n/a Rank: n/a

ORGANIZATION Business Sector: Financial services/Banking/Brokerage Founded: 1998 Employees: 80 (5 Web Staff) Offline Activity: Storefronts: None Catalogs Mailed: None Facilities: Bedford, MA headquarters Telecenter: In-house call center with 14 representatives Ownership: Private Trading Symbol: None Major Shareholders • CMGI @ Ventures • Century Capital Management, Inc. • Paine Webber Group, Inc. • Merrill Lynch • Onex Ventures Financing: $37.5+ million in three rounds Profitable: No

WEBSITE OVERVIEW Website: www.onecore.com Site Launch: April 1998 • eCongo.com Inc. (www.econgo.com) Site Version: 3.0 • Entrepreneur.com (www.entrepreneur.com) Site Type: Business-to-business • Inc. magazine/inc.com (www.inc.com) Business Model: Fee-based • National Small Business United (www.nsbu.org) Site Size: 10 services • NetLedger Inc. (www.netledger.com) Languages: English • Accepts Advertising: No OfficeMax Inc. (www.officemax.com) • Site Features: General help, contextual help, customer Peachtree Software (www.peachtree.com) • created content SBT Accounting Systems (www.sbt.com) Back-end Integration: Access to account information, • TrueAdvantage.com (www.trueadvantage.com) order history, order status, and payment processing are • Webforia Inc. (www.webforia.com) integrated into website. Affiliates Program: OneCore.com Affiliate Marketing Program MARKETING No. of affiliates: 15,000+ Media: Radio and television advertising, newspaper Commission Rate: $50.00 per converted referral advertising, business periodical advertising, direct mail Partnerships MANAGEMENT • Bigstep (www.bigstep.com) Jack Littman-Quinn, Chief Executive Officer. • Cisco Resource Network (www.cisco.com) Previously served as co-founder and president of PCs • Concentric Network (www.concentric.com) Compleat and as senior vice president, international sales • The Company Corporation (www.corporate.com) for Microamerica/Merisel, Inc. B.A. and Masters degree from Boston College. • EarthLink (www.earthlink.com)

128 copyright  2000 by The Intermarket Group The eCommerce Almanac

Joseph McConnell, Chief Financial Officer. Previously Operating System: Windows NT 4 served as senior vice president and CFO of AT/Comm Web Server Software: Microsoft IIS 4.0 Inc., president and CEO of Acentech Inc., a wholly-owned Commerce Platform: Proprietary application subsidiary of Bolt Beranek and Newman (BBN), and in Database Platform: Microsoft SQL Server various senior management positions with The Carlson Personalization: Under consideration Group, Inc. B.S. from Northeastern University. Affiliate Management: BeFree BFAST Christopher M. Hill, Vice President, Product Payment Processing: Proprietary application Management. Previously served as director of product marketing at Farsight Financial Services and in various COMMENTS positions at IDD Information Services, a Dow Jones OneCore.com offers a complete financial solution for Company. B.S. in Communications from Suffolk small businesses and entrepreneurs, including cash University and M.B.A. candidate at Bentley College. management, online bill payment, payroll services, 401(k) Paul B. Poh, Vice President, Technology. Previously plans, merchant services, loans, credit cards, and leases. A served as an officer with State Street Brokerage Services bricks-and-mortar presence -- enabling customers to and as manager of software engineering at IDD immediately deposit funds in their OneCore accounts -- Information Services. Attended Tufts University. has been created through partnerships with seven banks Tomas S. Yurkstas, Vice President, Marketing. operating more than 3,100 branches in 33 states. The Previously served as vice president and senior product company was originally founded as Boston Financial manager for Fleet Financial Group's online financial Network and changed its name to OneCore in March 1999. services division, marketing manager for Interactive Media The company has partnered with Fiserv Securities, Group, and business development director with Gofax Scudder Kemper Investments, Federated Investors, and International. B.S. in Electrical Engineering and M.B.A. PNC Bank to support its OneCore accounts. Online bill from University of Massachusetts. payment services are provided through a partnership with Gregory D. Tuel, Vice President, Business Development. CheckFree Corp. Payroll services and 401(k) plan Previously served as director of business development for administration are provided by Computing Resources and CheckFree Corp.’s Electronic Commerce Division and as Bankers Systems respectively. Merchant services are founder and president of LaserMail, Inc. B.A. from provided through Cardservice International and Michigan Muskingum College in New Concord, Ohio. Bankard Services. Credit card, lease financing, and SBA John J. Nusslein, Vice President and General Manager, loans are provided through partnerships with Advanta, Member Support. Previously responsible for management Sierra Cities, company finance.com, and CIT Financial of the trading and operations division at Insight Services. Management and in various positions at Fidelity Investments. B.S. and M.B.A. from Bentley College. Pamela J. Brewster, Director, Marketing Communications. Previously served as a managing editor at Standard & Poor's Published Image, as principal of Brewster Ingraham Consulting Group and in various positions at Bankers Trust Company. B.A. in Economics from Cornell University and M.B.A. from Stanford University. Larry Jansen, President, OneCore Securities, Inc. Previously served as a financial representative at Spartan Brokerage, Fidelity Investment's deep discount division, and as a registered representative for Dean Witter Reynolds. B.S. in General Business from Boston College and Masters degree in Personal Financial Planning from Bentley College.

INTERNET INFRASTRUCTURE Design Consultants: Corey MacPherson and Nash Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications Internet Connectivity: Two 100 BTX Connections Mirror Locations: One Hardware Platform: Intel Pentium

Outpost.com Outpost.com Home Page Cyberian Outpost, Inc. 23 North Main Street Kent, CT 06757, U.S.A. Tel. 860-927-2050 Fax 860-927-2055

Unique Visitors (March 2000): 643,000 Reach: 1.0% Rank: 1,116

ORGANIZATION Business Sector: Computer hardware/software Founded: March 1995 Employees: 164 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Kent, CT headquarters • Wilmington, OH distribution facility Telecenter: n/a Ownership: Public Trading Symbol: COOL (NASDAQ) Major Shareholders: • Darryl Peck, Chairman • Winfield Capital Corp. • Primus Venture Partners • Brand Equity Ventures Financing: $129.2 million in 3 rounds, IPO and private placement Profitable: No ($35.62 million loss for FY ’00) MARKETING WEBSITE OVERVIEW Media: Radio and television advertising, business Website: www.outpost.com, www.outpostauction.com, periodical advertising www.cyberianoutpost.com Partnerships: Site Launch: May 1995 • Amazon.com Inc. (www.amazon.com) Site Type: Business-to-consumer, Business-to-business • America Online (proprietary dial-up service) Business Model: Fixed pricing and auction/negotiated • America Online (www.aol.com) pricing • America Online (www.compuserve.com) Site Size: 170,000 products (approx.), including 130,000 • America Online (www.netscape.com) software titles • Big Planet (www.bigplanet.com) Languages: English, Cantonese, Chinese, Dutch, French, • Computer.com (www.computer.com) German, Italian, Japanese, Korean, Portuguese, Spanish, • theglobe.com inc. (www.theglobe.com) Swedish, and Taiwanese • Lycos Bertelsmann (www.lycos.co.uk) Accepts Advertising: Yes • Netcentives Inc. (www.clickrewards.com) Site Features: General help, one-click ordering/quick buy, • Scandinavia Online (www.scandinaviaonline.com) foreign language product information and order pages • StarMedia Network (www.starmedia.com) Back-end Integration: Access to customer account • information, inventory availability, order processing, ShopperConnection (www.shopperconnection.com) • payment processing, order status, and shipment tracking The Magma Group (gross roots marketing) are integrated into website. • USA Today Online (www.usatoday.com) • WingspanBank (www.wingspan.com) Affiliates Program: Outpost Affiliates Network

130 copyright  2000 by The Intermarket Group The eCommerce Almanac

No. of Affiliates: 80,000+ Sales to Repeat Customers1 Commission Rate: 3% of order value or 5% of order 2000...... 50% value paid in the form of store credit 1999...... 45% 1998...... 48% MANAGEMENT 1997...... n/a Darryl Peck, Founder and Chairman Robert Bowman, President and Chief Executive Officer Total Customers1 Katherine Vick, Executive Vice President for Busines 2000...... 627,000 Development and Chief Financial Officer 1999...... 280,000 Philip Rello, Chief Sales Officer 1998...... 103,000 Raymond Karrenbauer, Chief Technology Officer 1997...... 32,500 Don Bachman, Director-Business Intelligence Derek Holding, Director-Customer Experience Marketing Expenditures1 2000...... $41.67mn INTERNET INFRASTRUCTURE 1999...... $26.87mn Design Consultants: None 1998...... $ 5.94mn Site Maintenance: In-house staff 1997...... $ 1.41mn Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications Inc. Technology Expenditures1 Internet Connectivity: One DS-3 line 2000...... $7.00mn Mirror Location: None 1999...... $3.72mn Hardware Platform: Sun Microsystems Ultra Enterprise, 1998...... $1.06mn Hewlett-Packard Vectra 1997...... $0.38mn Operating System: Solaris UNIX Web Server Software: Netscape Enterprise Server 1. Fiscal year ending February 28/29. Commerce Platform: Broadvision One-to-One Commerce and One-to-One Enterprise, proprietary applications COMMENTS Web Servers: 20 total servers Outpost.com was founded in 1995 as Cyberian Outpost. Application Servers: See “Web Servers” above The company brand was shortened to Outpost.com in Database Platform: Oracle 8 1998. Database Servers: See “Web Servers” above The company operates its own fulfillment center in Personalization: Broadvision One-to-One Commerce Wilmington, Ohio -- a hub for its primary shipping partner, Affiliate Management: LinkShare Airborne Express -- which typically inventories Payment Processing: Smith-Gardner and Associates approximately 5,000 product SKUs. A substantial portion MACS II of products sold are supplied by distributors and Other Applications: BroadVision One-to-One Publishing wholesalers -- primarily Ingram Micro, Tech Data, and Center, Sagent Technology and SAS Institute visitor Pinacor/MicroAge -- who drop ship many orders directly analysis software, DataSage buyer analysis software, to customers. Rubric Enterprise Marketing Automation e-mail marketing In August 1999, the company unveiled a new initiative software, FairMarket AuctionPlace, Verity search that enabled other retailers to leverage its e-commerce software, Engage Accipiter Ad Server, Andromedia Aria infrastructure by providing them with site design, site real-time tracking software maintenance, and order management and fulfillment services through partnership agreements. The initial OPERATING BENCHMARKS partnership was with Tweeter Home Entertainment Group. Total Revenue1 Additional partnerships have since been negotiated with 2000...... $188.6mn Wolf Camera, Brookstone, Golf Galaxy, Sandbox.com 1999...... $ 85.2mn Computer.com and Exactly Vertical, which collectively 1998...... $ 22.7mn operate more than 1,000 storefronts. 1997...... $ 10.8mn The company began offering same day delivery service in April 2000 to Chicago, Detroit, Milwaukee, St. Louis, International Sales1 Minneapolis, Pittsburgh, Ohio, New York, Washington 2000...... 10% (D.C.), Memphis, Miami, Orlando, Houston, Dallas/Fort 1999...... 14% Worth, Boston, Phoenix, Salt Lake City, Charlotte, San 1998...... 36% Francisco, Denver, Los Angeles, and Atlanta for orders 1997...... 47% placed by 10:30 AM (EST). A new retrieval service was also launched in April, enabling customers to contact the company and arrange to have product returns picked-up.

Peapod, Inc. PeaPod Home Page 9933 Woods Drive, Suite 375 Skokie, IL 60076, U.S.A. Tel. 847-583-9400 Fax 847-583-9595

Unique Visitors (March 2000): 173,000 Reach: 0.3% Rank: 4,319

ORGANIZATION Business Sector: Groceries Founded: 1989 Employees: 610 full-time; 410 part-time Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Skokie, IL headquarters • Niles, IL distribution center • • Union City, CA distribution center Follett (www.efollet.com) • Chicago, IL distribution center • Food.com (www.food.com) • • Dallas, TX distribution center Hearst Corp. (www.homearts.com) • Long Island, NY distribution center Affiliates Program: Peapod Affiliate Program Telecenter: In-house call center Number of Affiliates: <1,000 Ownership: Public Commission Rate: $15.00 per referred first-time order Trading Symbol: PPOD (NASDAQ) and $15.00 for each referred customer’s third order Major Shareholders: • Koninklijke Ahold N.V. (16%) MANAGEMENT Andrew B. Parkinson, Chairman • Nevis Capital Management (13%) Marc van Gelder, President and Chief Executive Officer • Tribune National Marketing Company (8%) Dan Rabinowitz, Senior Vice President and Chief • Thomas Parkinson, CTO (5%) • Financial Officer Andrew Parkinson, Chairman (5%) Thomas L. Parkinson, Senior Vice President and Chief Financing: $145 million Technology Officer. Profitable: No ($28.453 million loss for FY ’99) John A. Furton, Senior Vice President and Chief Information Officer WEBSITE OVERVIEW Raymond Britt, Senior Vice President of Business Website: www.peapod.com Operations and Development Site Launch: January 1997 Michael Brennan, Senior Vice President of Marketing Site Type: Business-to-consumer and Product Management Business Model: Fixed pricing Randy Pickard, Director Electronic Marketing Site Size: 50,000+ products Languages: English INTERNET INFRASTRUCTURE Accepts Advertising: Yes Design Consultants: None Site Features: General help Site Maintenance: In-house staff Back-end Integration: Access to customer account Hosting Arrangement: On-site server(s) information, order history, and order processing are Access Provider: InterNAP Network Services, integrated into website. UUNET/MCI Worldcom Internet Connectivity: Two T-1 lines MARKETING Mirror Locations: None Media: Radio advertising, newspaper advertising, and Hardware Platform: Hewlett-Packard direct mail Operating System: HP-UX UNIX Partnerships: Web Server Software: Netscape FastTrack 2.01 • Excite@Home (www.excite.com) Commerce Platform: ART Technology Group Dynamo

132 copyright  2000 by The Intermarket Group The eCommerce Almanac

Web Servers: Multiple HP 9000 servers costs, and expand the product selection to include non- Database Platform: Informix v.7, proprietary application grocery items. Database Servers: One HP 9000 server In addition to offering online shopping services, the Personalization: ART Technology Group Dynamo company also enables consumer packaged goods Affiliate Management: Proprietary application companies to conduct highly-targeted, one-to-one Payment Processing: Proprietary application advertising and promotion programs, such as electronic couponing, and research consumer shopping behavior and OPERATING BENCHMARKS preferences. A Consumer Directions service provides Total Revenue companies with information about consumer behavior in 1999...... $73.13mn the Internet distribution channel. 1998...... $69.27mn In May 1999, the company partnered with Walgreen 1997...... $56.94mn Company to expand its product offering to include health and beauty products, household hardware, small Marketing Expenditures appliances, electrical supplies, audio and video tapes, 1999...... $7.17mn stationary and art supplies, and seasonal items, In October 1998...... $7.55mn 1999, a Peapod Packages service was launched, enabling 1997...... $7.73mn customers outside the company’s normal service areas to order from 7,000 non-perishable grocery items, health- and Technology Expenditures beauty-care products, pet supplies, and other household 1999...... $3.54mn goods and receive them through U.P.S. 1998...... $3.39mn In November 1999, the company partnered with McLane 1997...... $1.70mn Group, which provides distribution-logistics services and technology for food companies. The two companies also Orders Processed announced a personal investment in Peapod by McLane 1999...... 571,300 Group’s chairman and his appointment to Peapod's board 1998...... 494,700 of directors. 1997...... 396,600

Total Customers (end of period) 1999...... 111,900 1998...... 95,000 1997...... 100,400

COMMENTS Founded in 1989, Peapod is one of the original e- commerce companies. The company initially employed proprietary client software which dialed into the Peapod system and enabled customers to shop for groceries online; the transition to a browser-based service was completed in 1999. At the end of March 2000, the company served 129,800 customers in eight metropolitan markets: Chicago, San Francisco/San Jose, Columbus, Boston, Houston, Dallas and Austin, and Long Island. First quarter 2000 revenues were $24.9 million with a $12.7 million loss. Peapod originally fulfilled customer orders by using shoppers who simply picked items at a local grocery retailer that had partnered with the company. Twenty-two of these fulfillment centers across eight metro areas were used at the end of March 2000, down from 32 at the end of 1998. In 1998, a shift in distribution strategy was initiated and the company began establishing its own centralized, dedicated fulfillment centers. At the end of 1999, company-owned fulfillment centers were operating in five locations. The new distribution strategy will enable the company to improve order fulfillment efficiency, reduce

Pets.com, Inc. Pets.com Home Page 435 Brannan Street, Suite 100 San Francisco, CA 94107, U.S.A. Tel. 415-222-9999 Fax 415-222-9998

Unique Visitors (March 2000): 1,731,000 Reach: 2.6% Rank: 338

ORGANIZATION Business Sector: Pet Supplies Founded: October 1998 Employees: 279 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • San Francisco, CA headquarters • Union City, CA fulfillment center • America Online (proprietary dial-up service) • Greenwood, IN fulfillment center • America Online (www.aol.com) Telecenter: In-house call center with 80+ representatives • America Online (www.compuserve.com) Ownership: Public • America Online (www.netscape.com) Trading Symbol: IPET (NASDAQ) • Buena Vista Internet (www.go.com) Major Shareholders: • Buena Vista Internet (www.disney.com) • Amazon.com Inc. (30%) • Buena Vista Internet (www.family.com) • Hummer Winblad Venture Partners (16%) • Buena Vista Internet (www.mrshowbiz.com) • Bowman Capital Management (5%) • Discovery Communications (www.discovery.com) • Catalyst Investments (4%) • eHow Inc. (www.ehow.com) • Julie Wainwright (3%) • Financing: $214.89 million in three rounds and IPO Excite@Home (www.bluemountainarts.com) • Profitable: No ($61.78 million loss for FY ’99) FreeShop.com Inc. (www.freeshop.com) • Lycos Inc. (www.lycos.com) WEBSITE OVERVIEW • NBC Internet (www.snap.com) Website: www.pets.com • PetPlace.com, Inc (www.petplace.com) Site Launch: February 1999 • PlanetOut Corp. (www.planetout.com) Site Version: 3.0 • Xoom.com, Inc (www.xoom.com) Site Type: Business-to-consumer • Yahoo! Inc. (www.yahoo.com) Business Model: Fixed pricing • American Veterinary Medical Foundation Site Size: 15,000 (approx.) product SKUs • Best Friends Animal Sanctuary Languages: English • Design Industries Foundation Fighting AIDS Accepts Advertising: No • Discovery Communications (Discovery, TLC, and Site Features: General help, contextual help, threaded Animal Planet cable TV channels) discussions • NADRA Productions Back-end Integration: Access to customer account • Pet Sitters International information, order history, inventory availability, order • Safeway Inc. (in-store promotion) processing, payment processing, order status, and shipment Affiliates Program: Pets.com Associates Program tracking are integrated into website. Number of Affiliates: n/a Commission Rate: $5.00 per new customer plus 10% MARKETING of order value Media: Radio and television advertising, consumer periodical advertising MANAGEMENT Partnerships: • Julie Wainwright, Chairman and Chief Executive Officer. Amazon.com Inc. (www.amazon.com) Chris Deyo, President

134 copyright  2000 by The Intermarket Group The eCommerce Almanac

Paul Melmon, Vice President of Engineering 264,000 at the end of March 2000, up from 144,000 at the John Hommeyer, Vice President of Marketing end of 1999 and repeat customers accounted for 50% of Sue Ann Latterman, Vice President of Strategic total orders during the first quarter of 2000 compared to Alliances 39% during the fourth quarter of 1999. Total revenue for John Benjamin, Vice President of Merchandising the first quarter ending March 31, 2000 was $7.65 million Diane Hourany, Vice President of Operations with a loss of $39.09 million. Ralph Lewis, Vice President of Logistics The company’s largest shareholder is Amazon.com, Paul Manca, Chief Financial Officer which invested $58 million between April and November John Hollon, Vice President of Editorial 1999. In addition to investing in the company, John Boyden, Creative Director Amazon.com has provided consulting services to Pets.com across a range of operational and strategic initiatives and INTERNET INFRASTRUCTURE has participated in a variety of joint marketing activities, Design Consultants: Amazon.com Inc., eFORCE including e-mail promotions distributed to Amazon.com Site Maintenance: In-house staff customers and inserting Pets.com discount coupons in Hosting Arrangement: Co-located server(s) outbound orders. Access Provider: Exodus Communications The company began publishing a bi-monthly hardcopy Internet Connectivity: 100 Mbps connection publication, “Pets.com: The Magazine For Pets and Their Mirror Locations: One location planned Humans,” in November 1999. The first issue was Hardware Platform: Sun Microsystems distributed to approximately 760,000 households and Operating System: Solaris UNIX approximately 300,000 copies were distributed to Web Server Software: Netscape Enterprise Server 3.6 veterinary offices, shelters, pet sitter organizations, and Commerce Platform: BroadVision One-to-One, inserted into outbound Pets.com orders. proprietary applications In November 1999, the Company purchased a 10% Web Servers: Multiple Sun Enterprise servers interest in PetPlace.com for approximately $2 million and Database Platform: Oracle 8i an additional 7.5% stake for $1.5 million in March 2000. Database Servers: Multiple Sun Enterprise servers In December 1999, acquired Coolpetstuff.com for $75,000 Personalization: BroadVision One-to-One in cash and 40,000 shares of Pets.com common stock. Affiliate Management: Be Free BFAST During the first quarter of 2000, acquired an equity stake Payment Processing: CyberSource Credit Card Services in the U.K.-based online pet retailer Petspark.com, Ltd. for Other Applications: Quality Software Systems back-end $700,000 in cash. Acquired competitor Petstore.com in warehouse management system, Kana Solution customer June 2000 for 5.8 million shares of Pets.com common support, Broadbase Software customer data analysis suite, stock. BroadVision Dynamic Command Center

OPERATING BENCHMARKS Total Revenue 2000 (Q1) ...... $7.65mn 1999 (Q4) ...... $5.17mn 1999 (Q3) ...... $0.57mn 1999 (Q2) ...... $0.04mn

Sales & Marketing Expenditures 2000 (Q1) ...... $28.9mn 1999 (Q4) ...... $30.7mn 1999 (Q3) ...... $10.7mn 1999 (Q2) ...... $ 1.1mn

Development Expenditures 2000 (Q1) ...... $2.69mn 1999 (Q4) ...... $2.65mn 1999 (Q3) ...... $2.19mn 1999 (Q2) ...... $1.62mn

COMMENTS Pets.com operates one of the Internet’s leading pet supply and content sites. Customer accounts reached

PETsMART.com, Inc. PETsMART.com Home Page 35 Hugus Alley, Suite 210 Pasadena, CA 91103, U.S.A. Tel. 626-817-7100

Unique Visitors (March 2000): 1,547,000 Reach: 2.3% Rank: 348

ORGANIZATION Business Sector: Pet supplies Founded: February 1999 Employees: 72 Offline Activity Storefronts: 490 (operated by PETsMART, Inc.) Catalogs Mailed: None Facilities: • Pasadena, CA headquarters • Brockport, NY contract distribution facility Telecenter: Outsourced to PETsMART Inc.; 83 customer representatives in Brockport, NY Ownership: Private; IPO pending Trading Symbol: PSCM (NASDAQ) Major Shareholders • PETsMART, Inc. (48%) • Idealab! Holdings L.L.C. (22%) • Global Retail Partners L.P. (9%) • Idealab! Capital Management (4%) Financing: $81.9 million in two rounds Profitable: No ($52.0 million loss for FY ‘99)

WEBSITE OVERVIEW Website: www.petsmart.com Site Launch: June 1999 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 20,000 (approx.) SKUs Languages: English Accepts Advertising: No Site Features: General help, real-time customer-to- customer chat, customer created content Back-end Integration: Access to customer account information, order history, inventory availability, order processing, order status, and shipment tracking are integrated into website.

MARKETING Media: Television and radio advertising, direct mail • Big Dog Holdings (www.bigdogs.com) Partnerships: • Buena Vista Internet (www.go.com) • America Online (proprietary dial-up service) • coolsavings.com inc. (www.coolsavings.com) • America Online (www.aol.com) • GiftCertificates.com (www.giftcertificates.com) • America Online (www.compuserve.com) • LifeMinders.com (www.lifeminders.com) • America Online (www.netscape.com) • Microsoft Corp. (www.msn.com) • BarnesandNoble.com (www.barnesandnoble.com) • Women.com Networks (www.women.com)

136 copyright  2000 by The Intermarket Group The eCommerce Almanac

Affiliates Program: PETsMART.com Affiliate Program INTERNET INFRASTRUCTURE Number of Affiliates: 14,000 Design Consultants: None Commission Rate: 10% of net sales plus $5.00 Site Maintenance: In-house staff one-time bounty for each new customer Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications MANAGEMENT Mirror Locations: One Thomas P. McGovern, Jr., President and Chief Executive Hardware Platform: Sun Microsystems Officer -- Previously served as president and CEO of Operating System: Solaris Interpet, senior vice president, international of Warner Web Server Software: Apache Bros. Retail Stores, and vice president, international for Commerce Platform: InterWorld Commerce Exchange Warner Bros. Worldwide Retail. B.A. from the University Database Platform: Oracle 8 of Colorado and M.B.A. from Harvard Business School. Personalization: Net Perceptions Group Lens Richard A. Horn, Senior Vice President and General Recommendation Engine Merchandise Manager -- Previously served as vice Affiliate Management: Be Free BFAST president, merchandising at PETsMART, Inc., chief Payment Processing: Proprietary application financial officer of The Weisheimer Companies, and partner in Coopers & Lybrand. Graduate of Indiana OPERATING BENCHMARKS University. Total Revenue Michael D. Houlahan, Senior Vice President of Business 1999 (Q4) ...... $7.79mn Development and Off-line Marketing -- Previously served 1999 (Q3) ...... $2.09mn in various positions at Bain & Company, most recently as 1999 (Q2) ...... $0.57mn a Manager in the Technology Practice and Private Equity Group. B.A. from Yale University and M.B.A from Marketing Expenditures Harvard Business School. 1999 (Q4) ...... $23.21mn Daniel M. Kahn, Vice President of Merchandising -- 1999 (Q3) ...... $ 9.95mn Previously served as director of corporate consumable 1999 (Q2) ...... $ 0.31mn brands for PETsMART, Inc., and as director of category management and as director of marketing and procurement Development Expenditures for Alliant Foodservice. B.S. from the University of 1999 (Q4) ...... $1.10mn Illinois and M.B.A. from DePaul University. 1999 (Q3) ...... $0.78mn Eric D. Kidd, Chief Technology Officer and Vice 1999 (Q2) ...... $0.46mn President of Engineering -- Previously served in various positions, including director of corporate technology Total Customers (end of period) development, at AltaVista and as a Member of Technical 1999...... 180,000 Staff at NASA's Jet Propulsion Laboratory. B.S. from California State Polytechnic University and M.S. from the COMMENTS University of Southern California. PETsMART.com was created in May 1999 when Gary R. Marcotte, Chief Financial Officer -- Previously PETsMART, Inc., a bricks-and-mortar pet supplies served as vice president and CFO of Walt Disney retailer, merged its online operations -- together with a $16 Company’s Regional Entertainment division, and as vice million equity investment -- with competitor president of international accounting and finance, assistant PetJungle.com. idealab! and Global Retail Partners, the treasurer, and assistant controller of Walt Disney principal investors in PetJungle.com own a 50.1% majority Company. B.A. in Economics and Physics from Gustavus interest in the newly-created enterprise. Adolphus College and M.B.A. from the University of An agreement between PETsMART.com and its offline Wisconsin. counterpart enables the company to leverage the Carina J. Schaldach-Walker, Senior Vice President of purchasing, distribution, and customer service Site Development and Operations -- Previously served as infrastructure of PETsMART, Inc. as well as participate in director of marketing for Consumer's Network and as a variety of joint marketing activities, including in-store director of new ventures for the Recycler Classifieds. B.A. promotions and visibility in print and broadcast advertising Duke University and M.B.A. Harvard Business School. campaigns. The partnership agreement allows the Mark J. Williams, Vice President of Online Marketing -- company to sell PETsMART, Inc.'s proprietary branded Previously served as director of catalog circulation and products. database marketing for PETsMARTDirect and as group The company’s website is integrated with PETsMART, manager of database marketing for Sara Lee Direct. B.A. Inc.’s AS/400 system over a virtual private network for from University of Missouri and M.B.A. from Rockhurst inventory management and fulfillment. PETsMART, Inc. College

copyright  2000 by The Intermarket Group 137 The eCommerce Almanac processes all orders for fulfillment and its warehouse management system updates the website data on inventory PlanetRx.com Inc. receiving, shipping, quantities and location. 349 Oyster Point Blvd., Suite 201 In September 1999, the company announced a South San Francisco, CA 94080, U.S.A. partnership with Big Dog Holdings (NASDAQ: BDOG) to Tel. (650) 616-1500 co-market and co-promote each other’s products and services. Big Dog agreed to provide in-store promotion of Fax (650) 616-1585 PETsMART.com in its 182 retail stores as well as promote the company in the 2+ million catalogs it distributes Unique Visitors (March 2000): 1,427,000 annually and on its Big Dog website. Big Dog also Reach: 2.1% invested $2.5 million in the company as part of the Rank: 378 partnership and PETsMART.com purchased warrants for 121,000 shares of Big Dog of common stock at $10 per ORGANIZATION share. Business Sector: Personal products (online pharmacy) In October 1999, the company acquired Digital Founded: March 1995 Communities, which operates the AcmePet.com pet Employees: 390 community site. In March 2000, the company announced Offline Activity an agreement with HomePage.com to provide the Storefronts: None infrastructure and services to enable customers and visitors Catalogs Mailed: None to create their own customized home pages on the Facilities: PETsMART.com website. • San Francisco, CA headquarters • Memphis; TN distribution facility Telecenter: None Ownership: Public Trading Symbol: PLRX (Nasdaq ) Major Shareholders • Benchmark Capital (10.5%) • Sequoia Capital (10.5%) • Markas Holding B.V (5.5%) • Express Scripts, Inc (19.9%) Financing: $144.5 million from 4 rounds and IPO Profitable: No ($98.014 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.planetrx.com Site Launch: March 1999 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 27,000 (approx.) product SKUs Languages: English Accepts Advertising: No Site Features: General help, contextual help, real-time customer-to-customer chat, threaded discussions Back-end Integration: Access to customer account information, order history, inventory availability, order status, and shipment tracking are integrated into website.

MARKETING Media: Does not advertise in off-line media Partnerships: • America Online (Proprietary dial-up service) • America Online (www.aol.com) • America Online (www.digitalcity.com) • BabyCenter.com (www.babycenter.com) • BarnesandNoble.com (www barnesandnoble.com) • ePhysician.com (www.ephysician.com)

138 copyright  2000 by The Intermarket Group The eCommerce Almanac

PlanetRx.com Home Page MANAGEMENT Michael Beindorff, Chief Executive Officer James Chong, Senior Vice President and Chief Technology Officer -- Previously served in various positions at Charles Schwab and Company, including vice president, architecture and planning. Steve Valenzuela, Senior Vice President of Finance and Chief Financial Officer -- Previously served ad vice president of finance and CFO for LinkExchange and as vice president of finance for Coherent Laser Group Stephanie Schear, Senior Vice President of Business Development and Sales -- Co-founded PlanetRx. Previously managed e-commerce and healthcare venture investments for Intel Corp.'s Corporate Business Development Group, served as vice president of business development at FireFly, and associate at Alex. Brown & Sons. B.A. and M.A. in Economics from Brandeis University and M.B.A. from Harvard Business School. John McAlpin, Senior Vice President of Distribution Services -- Previously served as vice president of technical operations at Skywire, Inc., a networking company, vice president at First Union Corp. and managing director of FedEx Corp.’s Logistics Services Division. B.S. in Mechanical Engineering from the University of Memphis. Allan Goldman, Vice President of Merchandising -- Previously served as senior vice president of marketing and merchandising for The Cosmetic Center, a retail cosmetic company and vice president of merchandising for Rite Aid 48 Corp. B.S. in Health Science from James Madison University. Matthew Naythons, M.D. -- Vice President of Editorial and Publisher -- Founder of Epicenter Communications (1991), and its two online health subsidiaries, NetHealth and NetMed (1996). B.S. from Muhlenberg College and M.D. from Hahnemann University.

INTERNET INFRASTRUCTURE Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) Access Provider: Exodus Communications Mirror Locations: None Hardware Platform: Sun Microsystems • Express Scripts Inc. Operating System: Microsoft NT 4.0 • Gazoontite.com (www.gazoontite.com) Web Server Software: Microsoft IIS 4.0 • iVillage, Inc. (www.ivillage.com) Commerce Platform: Microsoft Site Server Commerce • Netcentives Inc. (www.clickrewards.com) Edition • News America Inc. (mixed media agreement) Web Servers: One • NextCard Inc. (www.nextcard.com) Application Servers: One • ShopperConnection (www.shopperconnection.com) Database Platform: Microsoft SQL Server and IBM UDB • Women.com Networks (www.women.com) Database Servers: One • Yahoo! Inc. (www.yahoo.com) Personalization: Not used Affiliates Program: PlanetRx Affiliate Program Affiliate Management: Be Free BFAST Number of Affiliates: n/a Payment Processing: CyberCash, Achex Payment Service Commission Rate: 15% of non-prescription product sales

OPERATING BENCHMARKS In October 1999, the company acquired the e- Total Revenue commerce operations of YourPharmacy.com from 1999...... $8.99mn pharmacy benefits manager Express Scripts for a 19.9% 1998...... $0.00mn stake in PlanetRx plus a minimum of $14.65 million annually for five years. The acquisition agreement also Online Sales appoints PlanetRx as the exclusive on-line pharmacy to 1999...... $7.86mn Express Scripts 36 million members and Express Scripts 1998...... $0.00mn will actively promote the company and its online storefront to its members. Sales to Repeat Customers In January 2000, PlanetRx was the first online 1999...... 35% pharmacy to fulfill a prescription transmitted over the 1998...... 0% Internet. The transaction used AHT Corp.’s @Rx prescription-management service to securely transmit a Marketing Expenditures script from a physician in Chicago to the company’s 1999...... $55.18mn Memphis distribution center. 1998...... $ 0.91mn In June 2000, the company announced that it had laid- off 70 employees -- approximately 15% of its workforce -- Development Expenditures as a cost cutting measure. The cut-backs reportedly 1999...... $12.95mn affected all areas of the company. 1998...... $ 1.03mn

Total Customers (end of period) 1999...... 254,000 1998...... 0

Registered Users (end of period) 1999...... 537,000 1998...... 0

COMMENTS PlanetRx.com is a full-service online pharmacy, offering products across six categories: prescription drugs, non- prescription drugs, personal care, beauty and personal care, vitamins and nutrition, and medical supplies. The company’s website also provides numerous content and community services, including detailed information on symptoms, treatments and alternative care for over 100 disease categories. Domain names owned by the company include aids.com, diabetes.com, alzheimers.com, acne.com and 25 others; 16 of these satellite sites are currently operated as part of the PlanetRx website. For the first quarter ending March 31, 2000, the company reported $8.77 million in revenue with a loss of $49.64 million. Repeat customers accounted for 33% of orders during the period and prescription drug sales accounted for 49% of revenue. Registered members increased to 854,000 and total customers reached 400,000 at the end March. A substantial majority of the prescription and over-the- counter products sold by the company are supplied through a strategic partnership with McKesson. The two companies have negotiated a multi-year agreement that requires PlanetRx to purchase 80% of prescription and non-prescription drugs, home healthcare products, sundries and health and beauty aids from McKesson.

140 copyright  2000 by The Intermarket Group The eCommerce Almanac

Priceline.com Inc. Priceline.com Home Page 800 Connecticut Avenue Norwalk, CT 06854, U.S.A. Tel. 203-299-8000

Unique Visitors (March 2000): 4,421,000 Reach: 6.6% Rank: 81

ORGANIZATION Business Sector: Automobiles, Travel, Banking/Financial Services, Food/Coffee/Tea Founded: July 1997 Employees: 378 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Stamford, CT headquarters MARKETING • New York, NY branch office Media: Television and radio advertising, and newspaper Telecenter: Outsourced to CallTech Communications with advertising call centers in Stamford, CT, Columbus, OH, and Partnerships: Charlotte, NC. • Ownership: Public AT&T WorldNet (www.att.net) • Trading Symbol: PCLN (NASDAQ) Preview Travel (www.previewtravel.com) • Major Shareholders: Travelocity.com (www.travelocity.com) • Jay Walker, Vice Chairman (42%) Affiliate Program: Priceline.com Affiliate Network • Richard Braddock, CEO (12%) No. of Affiliates: n/a Commission Rate: 1% of net revenue from • General Atlantic Partners (18%) “bound” (completed) transactions • Delta Airlines, Inc. (12%) • Vulcan Ventures Inc. (6%) MANAGEMENT Financing: $1.592 billion in three rounds, IPO, secondary offering, and convertible debt offering Richard Braddock, Chairman and Chief Executive Profitable: No ($152.6 million loss for FY ’99) Officer. Previously served as the non-executive chairman of True North Communications, Inc., an advertising WEBSITE OVERVIEW company, and Ion Laser Technology, a laser technology Website: www.priceline.com company, as a special advisor to General Atlantic Partners, Site Launch: April 1998 principal of Clayton, Dubilier & Rice, CEO of Medco Site Type: Business-to-business, business-to-consumer Containment Services, and in a variety of positions at Business Model: Negotiated pricing (“name your own Citicorp price”) Daniel Schulman, President and Chief Operating Officer. Site Size: Nine product/service categories covering travel, Previously served in various positions at AT&T, including automobiles, groceries, home loans, gasoline, long- president of AT&T Consumer Markets, president of distance telephone service, and person-to-person sales. AT&T WorldNet Service, and vice president, business Languages: English services marketing of AT&T Business Markets Division. Accepts Advertising: No Michael McCadden, Executive Vice President and Chief Site Features: General help, contextual help Marketing Officer. Previously served as executive vice Back-end Integration: Access to customer account president of Gap, Inc. Direct, E.V.P. of Gap Global information, inventory availability, order processing, Marketing, director of global advertising and public payment processing, and order status are integrated into relations for Calvin Klein Cosmetics Company, and in website. various positions at Lever Brothers/Chesebrough-Pond's and The Gillette Company.

Heidi G. Miller, Senior Executive Vice President, OVERVIEW Strategic Planning and Administration. Previously served Priceline.com is the originator of the interactive “name as CFO of Citigroup, CFO of Travelers Group, and in your own price” approach to online sales, a method it calls various positions at Chemical Bank. “demand collection” selling. The company describes the Ronald Rose, Chief Information Officer. Previously process as “collecting consumer demand,” in the form of served in various positions with Standard & Poor's, individual customer price offers for a given product or including chief technology officer of Retail Markets. service and then electronically communicating that Michael Diliberto, Senior Vice President, Technology demand to participating sellers -- or accessing the Mitch Truwit, Senior Vice President, Corporate participating sellers' private databases directly -- to Development determine if the customer's offer can be fulfilled based on Andy Abowitz, Vice President, International Business sellers’ pricing rules and information. “Adaptive Development marketing programs” enable the company to integrate customer acquisition programs for third parties into the INTERNET INFRASTRUCTURE demand collection sales process, increasing the percentage Design Consultants: None of successful transactions and generating additional fee Site Maintenance: In-house staff income. Hosting Arrangement: Co-located Server(s) The company launched its website in April 1998, Access Provider: Exodus Communications offering name-your-own-price airline tickets. In July 1998 Mirror Locations: One the service was expanded to include automobiles, followed Hardware Platform: Compaq ProLiant by hotel rooms in November 1998, home loans in January Operating System: Windows NT 4 1999, groceries in November 1999, car rentals in February Webserver Software: Microsoft IIS 4.0 2000, and gasoline and long distance telephone service in Commerce Platform: Proprietary Java middleware June 2000. In January 2000, the company launched a application Priceline Perfect YardSale service, enabling individuals to Web Servers: 30+ ProLiant 1850R and 6400 servers sell items online in their own name-your-own-price Database Platform: Oracle 8 person-to-person transactions. Database Servers: Multiple ProLiant 1850R servers The company’s key partners include United Airlines, Personalization: Not used American Airlines, US Airways, Delta Air Lines, Affiliate Management: LinkShare Continental, Northwest, TWA, and America West for Payment Processing: CyberSource airline tickets; National Car Rental, Alamo Rent A Car, Other Applications: BEA Systems WebLogic Server, Hertz, and Budget Rent A Car for car rentals; AutoNation Chrome.com auto configuration engine for car purchases; LendingTree and Alliance Capital Partners for home loans; Net2Phone, deltathree.com, and OPERATING BENCHMARKS ZeroPlus.com for long distance service; and Kroger, Total Revenue Safeway, Albertson's Ahold USA, and more than 30 other 1999...... $482.4mn supermarkets chains in the northeast, southeast and 1998...... $ 35.2mn Midwest for Priceline WebHouse Club. 1997...... $0.0 Total revenue for the first quarter ending March 31, 2000 was $313.8 million with a loss of $7.3 million. The Marketing Expenditures company added 1.5 million new customers during the 1999...... $79.6mn quarter -- bringing its total customer base to 5.3 million -- 1998...... $24.4mn and served 830,000 repeat customers. The Priceline 1997...... $ 0.4mn WebHouse Club added more than 300,000 new customers during the quarter. Technology Expenditures In April 1999, the company announced a five year 1999...... $14.0mn partnership with credit card issuer First USA to create an 1998...... $11.1mn adaptive marketing program which enables customers to 1997...... $ 1.1mn increase the amount of their Priceline purchase offers by specified amounts if they apply for a First USA credit card Total Members (end of period) or pay for their purchase with a First USA credit card. 1999...... 3,800,000 Other adaptive marketing partners include Discover, 1998...... 100,000 AT&T, Sprint, and Earthlink. 1997...... 0

142 copyright  2000 by The Intermarket Group The eCommerce Almanac

In September 1999, the company purchased an equity stake in LendingTree, participating in a $50 million round Quicken Loans Inc. of financing with GE Capital and three other institutional Intuit Inc. investors. 20555 Victor Parkway The company licensed its name-your-own-price Livonia, MI 48152, U.S.A. technology to the WebHouse Club in September 1999 in return for royalties plus warrants which entitle Priceline to Tel. 734-805-5000 acquire a majority stake in WebHouse. WebHouse, which is backed in-part by Vulcan Ventures, enables consumers Unique Visitors (March 2000): 2,431,000 to name their own private prices for a variety of retail Reach: 3.6% products and then get those prices when they shop at any Rank: 185 of more than 10,000 participating supermarkets. In May 2000, WebHouse partnered with direct mail company ORGANIZATION ADVO to co-develop internet-based marketing solutions Business Sector: Financial Services for ADVO's 24,000 clients and 600 sales associates, based Founded: 1983 on WebHouse’s Half-Price token loyalty program. Employees: 600 (approx.) In January 2000, the company announced a partnership Offline Activity: with Hutchison Whampoa Limited to extend the name- Storefronts: None your-own-price process into Asia, including China, Hong Catalogs Mailed: None Kong, India, Taiwan, Indonesia, Singapore, Thailand, Facilities: Korea, Malaysia, the Philippines and Vietnam. In • Livonia, MI headquarters February 2000, the company partnered with Frank Blount • Rochester, MI branch office and Peter Shore, former senior executives of Telstra Corp. • West Bloomfield, MI branch office Ltd., to launch MyPrice and expand into Australia and Telecenter: In-house call center with 400+ loan New Zealand. officers/customer service representatives Ownership: Private Trading Symbol: None Major Shareholders: Wholly-owned subsidiary of Intuit Inc. (NASDAQ: INTU) Shareholder Equity: $1.561 billion (Intuit Inc.) Profitable: Yes (Intuit reported a $142.36 million profit for 9 months ending April 30, 2000)

WEBSITE OVERVIEW Website: www.quicken.com, quickenloans.quicken.com Site Launch: November 1997 Site Type: Business-to-consumer Business Model: Fee-based Site Size: Conventional, sub-prime, home equity, government, and jumbo mortgage loans from Quicken Loans and from 12+ other lenders Languages: English Accepts Advertising: Yes Site Features: General help, contextual help, threaded discussions, real-time customer-to-customer chat, customer created content Back-end Integration: Access to customer account information, payment processing, transaction processing, and transaction status are integrated into website.

MARKETING Media: Radio and television advertising, newspaper advertising, business and consumer periodical advertising, direct mail

QuickenLoans Home Page Access Providers: UUNET/MCI Worldcom, Cable & Wireless Mirror Locations: Two Hardware Platform: Intel Pentium Operating System: Windows NT 4 Web Server Software: Microsoft IIS 4.0 Commerce Platform: Proprietary applications Web Servers: 20 Application Servers: 20 Database Platform: Microsoft SQL Server Database Servers: 3 Personalization: Not used Affiliate Management: Not used Payment Processing: First USA Other Applications: Microsoft SourceSafe, Brio Technology Brio.Enterprise suite

OPERATING BENCHMARKS Total Revenue1 2 2000 (9 mos.)...... $931.57mn 1999...... $847.57mn 1998...... $592.74mn

Marketing Expenditures1 2 2000 (9 mos.)...... $216.19mn 1999...... $191.63mn 1998...... $164.83mn

Partnerships: 1. Fiscal year ending October • America Online (proprietary dial-up service) 2. Total revenue and expenditures because company does not breakout • America Online (www.aol.com) data for Quicken Loans unit • BUYandHold.com Securities (www.buyandhold.com) • Excite@Home (www.excite.com) COMMENTS • CNNfn (www.cnnfn.com) Quicken Loans was launched by Intuit Inc. in November • Homebid.com (www.homebid.com) 1997 under the name QuickenMortgage. The original • ImproveNet (www.improvenet.com) service was an online intermediary between home mortgage applicants and the company’s partner financial • Realtor.com (www.realtor.com) institutions. Loan applications were simply collected and Affiliate Program: None transmitted to lenders for processing. Intuit partnered with Mortgage.com to provide the site’s back-end processing MANAGEMENT engine. Daniel Gilbert, Chief Executive Officer (Quicken Loans) In October 1999, Intuit acquired Rock Financial -- a David Kinser, Senior Vice President, Service Delivery traditional and online mortgage broker -- for $370 million and Operations (Intuit Inc.) in Intuit common stock and combined it with the Greg Santora, Senior Vice President, Finance and Chief QuickenMortgage unit. Rock Financial reported $49.0 Financial Officer (Intuit Inc.) million in revenue for the nine months ending September Raymond Stern, Senior Vice President, Corporate 30, 1999 -- the last reporting period prior to its acquisition Strategy and Marketing (Intuit Inc.) by Intuit -- and $97.6 million for the 1998 fiscal year. The Eric Dunn, Senior Vice President and Chief Technology two companies originated and closed a combined $3.5 Officer (Intuit Inc.) billion in mortgages during 1999. In October 1999, Intuit also acquired Detroit-based INTERNET INFRASTRUCTURE Title Source, a provider of title insurance and escrow Design Consultants: None services, for $6 million. Site Maintenance: In-house staff In January 2000, QuickenMortgage was renamed Hosting Arrangement: On-site server(s) (located at Intuit) Quicken Loans and the company’s website was Internet Connectivity: Multiple shared DS-3 lines relaunched. At the same time, the company began offering borrowers its own direct mortgage loans -- which

144 copyright  2000 by The Intermarket Group The eCommerce Almanac the company resells servicing rights for to various financial institutions -- along with loans from more than a Recreational Equipment Inc. th dozen other lenders, such as GE Capital Mortgage and 6750 South 228 Street GMAC Mortgage. Integration of the QuickenMortgage Kent, WA 98032, U.S.A. and Rock Financial websites and back-end infrastructures Tel. 253-891-2500 was completed in March 2000. The Quicken Loans site is integrated into Intuit’s Unique Visitors (March 2000): 297,000 Quicken.com personal and small business financial Reach: 0.4% services and content site. Rank: 2,219

ORGANIZATION Business Sector: Sporting goods Founded: 1938 Employees: 5,500 total (Web staff: 150) Offline Activity Storefronts: 54 Catalogs Mailed: n/a Facilities: • Kent, WA headquarters • Sumner, WA distribution facility Telecenter: In-house call center with 250 representatives Ownership: Private; membership cooperative Trading Symbol: None Major Shareholders: n/a Shareholder Equity: $196.9 million (membership equity) Profitable: Yes

WEBSITE OVERVIEW Website: www.rei.com, www.rei-outlet.com Site Launch: September 1996 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 94,000 products and 45,000+ content pages Languages: English and Japanese Web sites; ordering information in French, German, Spanish Accepts Advertising: No Site Features: General help, contextual help, online real- time customer service, threaded discussions, customer created content, foreign language order pages, foreign language product information Back-end Integration: Access to customer account information, order history, inventory availability, order processing, and payment processing are integrated into website; web access to order status and shipment tracking are planned.

MARKETING Media: Radio and television advertising, newspaper advertising, consumer and business periodical advertising, direct mail Partnerships: • America Online (www.aol.com) • America Online (www.netscape.com) • America Online (www.compuserve.com) • Della.com (www.della.com)

REI Home Page INTERNET INFRASTRUCTURE Design Consultants: None Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) Access Provider: InterNAP, U.S. West Internet Services Internet Connectivity: DS-3, multiple T-1's Mirror Locations: None Hardware Platform: IBM RS/6000 Operating System: IBM AIX Web Server Software: IBM Lotus Domino Go Commerce Platform: IBM Net.Commerce Web Servers: Multiple RS/6000 servers Database Platform: IBM DB/2, Oracle Database Servers: Multiple RS/6000 servers Personalization: Digital Impact (personalized e-mail) Affiliate Management: Proprietary application Other Applications: RedCart Universal Shopping Cart

OPERATING BENCHMARKS Total Revenue 1999...... $620.9mn 1998...... $587.1mn 1997...... $536.1mn

Estimated Online Sales 1999...... $40.98mn 1998...... $11.74mn 1997...... n/a Total Members (end of period) 1999...... 1.7mn 1998...... 1.6mn 1997...... 1.5mn

• Lycos, Inc. (www.lycos.com) • Microsoft Corp. (www.msn.com) • ShopperConnection (www.shopperconnection.com) Affiliates Program: REI Online Affiliates Program Number of Affiliates: n/a Commission Rate: 5%

MANAGEMENT Dennis Madsen, President and CEO Mary Park, Vice President Internet Technologies Matt Hyde, Vice President, Online Sales

146 copyright  2000 by The Intermarket Group The eCommerce Almanac

Reel.com, Inc. Reel.com Home Page 1400 65th Street, Suite 250 Emeryville, CA 94608, U.S.A. Tel. 510-549-3333 Fax 510-549-3331

Unique Visitors (March 2000): 1,373,000 Reach: 2.0% Rank: 461

ORGANIZATION Business Sector: Videos and DVDs Founded: September 1996 Employees: 230 Offline Activity Storefronts: 1,700 (Hollywood Entertainment) Catalogs Mailed: None Facilities: • Emeryville, CA headquarters • San Leandro, CA distribution center • Seattle, WA corporate office • Los Angeles, CA corporate office Telecenter: In-house call center with 70+ representatives and outsourced to Modus Media International; E-mail support outsourced to PeopleSupport and Kana Communications Ownership: Private Trading Symbol: None Major Shareholders: Wholly-owned subsidiary of Hollywood Entertainment (NASDAQ: HLYW) Financing: $96.88 million Profitable: No

WEBSITE OVERVIEW Website: www.reel.com Site Launch: January 1997 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 50,000 video tape titles and 4,500 DVD titles Languages: English Accepts Advertising: Yes Site Features: General help, one-click ordering/quick buy, online real-time customer service Back-end Integration: Access to customer account • America Online (www.compuserve.com) information, order status, and order processing are • Ask Jeeves Inc. (www.ask.com) integrated into website. • Collaborative Media (www.etown.com) • CoolSavings.com (www.coolsavings.com) MARKETING • Digital Chicago (www.suntimes.com) Media: Radio advertising and consumer periodical • Discover Financial Services advertising • Excite@Home (www.excite.com) Partnerships: • Excite@Home (www.home.com) • America Online (proprietary dial-up service) • E! Online (www.eonline.com) • America Online (www.aol.com) • e-commerce Solutions (www.brandsforless.com) • America Online (www.netscape.com) • eHow Inc. (www.ehow.com) copyright  2000 by The Intermarket Group 147 The eCommerce Almanac

• Film.com (www.film.com) Marketing Expenditures • Inktomi Corp. (Inktomi Shopping Engine) 1999 (9 mos.)...... $16.67mn • Lycos Inc. (www.lycos.com) 1998...... $13.22mn • Microsoft Corp. (www.msn.com) 1997...... $ 0.57mn • Movieline Online (www.movielinemag.com) • mySimon Inc. (www.mysimon.com) Development Expenditures 1999 (9 mos.)...... $6.78mn • PlanetOut Corp. (www.planetout.com) 1998...... $4.33mn • Promotions.com (www.webstakes.com) 1997...... $0.95mn • ShopNow.com Inc. (www.bottomdollar.com) • ShopperConnection (www.shopperconnection.com) COMMENTS • Times Mirror (www.calendarlive.com) Reel.com was founded in September 1996, enabling • Times Mirror (www.latimes.com) customers to rent movie videos online and receive and • Turner Network Television (www.roughcut.com) return them through U.P.S. Early investors included • TV Guide Inc. (www.tvguide.com) CMGI, Allen & Company, and Vulcan Ventures. The • Visa International company was acquired by Hollywood Entertainment in • WingspanBank.com (www.wingspan.com) October 1998 for approximately $97 million; $32.7 million • Yahoo! Inc. (geocities.yahoo.com) in cash and $64.2 million in Hollywood Entertainment Affiliates Program: Reel.com Producers Program common and redeemable preferred stock. At the time of No. of Affiliates: 200,000+ the acquisition, a group of Reel.com’s investors -- CMG Commission Rate: 5% of gross revenue Information Services, Intel Corp., and Vulcan Ventures -- purchased a $53 million stake in Hollywood MANAGEMENT Entertainment. Dave Rochlin, Chief Operating Officer The company abandoned the video rental business in Alex Bond, Chief Financial Officer October 1998 to focus exclusively on video and DVD Keith Osborne, Chief Information Officer sales. The reel.com site today serves as an online Harry Bernstein, Vice President of Corporate community for movie enthusiasts, providing a combination Development news, film reviews, trivia, interviews, film clips, Jeff Schwager, Vice President of Content recommendations and an online storefront offering approximately 50,000 video and 4,500 DVD movie titles. INTERNET INFRASTRUCTURE The company reported $13.8 million in revenue for the Design Consultants: None first three months of 2000 and 1.1 million total cumulative Site Maintenance: In-house staff customers. Hosting Arrangement: Co-located server(s) In February 1999, Hollywood Entertainment announced Access Provider: Exodus Communications the creation of a digital assets subsidiary, Internet Mirror Locations: None Hollywood Inc., which now owns and operates its online Hardware Platform: Compaq ProLiant businesses, including Reel.com. The unit also plans to Operating System: Microsoft Windows NT 4, Windows develop and acquire Internet-based entertainment 2000 businesses. Web Server Software: Microsoft IIS 4.0 and IIS 5.0 The company launched a hardcopy entertainment Commerce Platform: Microsoft Site Server Commerce magazine, Reel Magazine, in March 2000. The Edition publication will be published 10 times per year with Database Platform: Microsoft SQL Server 7.0 200,000 copies distributed through the Reel.com website, Personalization: Entertainment Decisions Clair V, the 200,000 Producers Program affiliate sites, and the Microsoft Site Server Commerce Edition 1,700 Hollywood Entertainment video rental stores. Affiliate Management: Be Free BFAST In June 2000, the company announced that it was Other Applications: Verbind LifeTime, Brodia Group shutting down its e-commerce operations, closing its San Personal Commerce Manager, CyberCash InstaBuy, Leandro, CA distribution center, and would cut its staff RedCart Universal Shopping Cart, Digital Impact e-mail count by approximately 200 individuals. The company marketing services plans to continue operating Reel.com as a content site and will maintain its database of movies available at the OPERATING BENCHMARKS Hollywood Video stores. BUY.COM will take over all Total Revenue aspects of the site’s video/DVD online storefront and 1999 (9 mos.) ...... $21.61mn back-end fulfillment -- and will also license Reel.com 1998...... $15.04mn content for its own site -- under a partnership agreement 1997...... $ 0.75mn between the two companies.

148 copyright  2000 by The Intermarket Group The eCommerce Almanac

Charles Schwab & Co. Inc. Charles Schwab Home Page Charles Schwab Corp. 101 Montgomery Street San Francisco, CA 94104, U.S.A. Tel. 415-627-7000 Fax 415-627-8840

Unique Visitors (March 2000): 1,013,000 Reach: 1.5% Rank: 668

ORGANIZATION Business Sector: Banking/Brokerage/Financial services Founded: 1971 Employees: 20,300 total (2,400+ IT staff) Offline Activity Storefronts: 356 U.S. branches Catalogs Mailed: None Facilities: • San Francisco, CA headquarters • Phoenix, AZ data center (2 locations) • Phoenix, AZ telecommunications center • Indianapolis, IN telecommunications center • Orlando, FL telecommunications center • Denver, CO telecommunications center • Jersey City, NY Schwab Capital Markets headquarters Telecenter: Four in-house call centers with 8,000 customer contact staff Ownership: Public Partnerships: • Trading Symbol: SCH (NYSE) Excite, Inc. (www.excite.com) • Major Shareholders: n/a iVillage, Inc. (www.ivillage.com) Shareholder Equity: $2.274 billion • BabyCenter Inc. (www.babycenter.com) Profitable: Yes ($577.973 million profit for FY ’99) • Microsoft Corp. (investor.msn.com) • Intuit Inc. (link with Quicken) WEBSITE OVERVIEW • Microsoft Corp. (link with MS Money) Website: www.schwab.com, www.myschwab.com, Affiliates Program: None www.schwab.com/chinese, www.schwab-worldwide.com Site Launch: April 1996 MANAGEMENT Site Type: Business-to-consumer, business-to-business Giddeon Sasson, Enterprise President-Electronic Business Model: Commission-based Brokerage Site Size: U.S. stocks, options, Treasury securities, listed Dawn Gould Lepore, Vice Chairman and Chief corporate bonds, and 1,100 mutual funds Information Officer Languages: English and Chinese Fred Matteson, Executive Vice President of Technology/ Accepts Advertising: No Services Site Features: General help, contextual help, threaded Jan Hier-King, Senior Vice President of Electronic discussions, low bandwidth version, foreign language Brokerage Technology information and order pages Arthur Shaw, Senior Vice President-Electronic Brokerage Back-end Integration: Access to customer account Development information, transaction history, transaction processing, Neal Goldstein, Senior Vice President for Architecture and transaction status integrated into website. and Planning Randy Goldman, Vice President-Electronic Brokerage MARKETING Development Media: Radio and television advertising, consumer and business periodical advertising

Martha Deevy, Vice President-Electronic Brokerage Online Transactions (avg. trades per day)2 Marketing 1999...... 119,100 Michael Raneri, Vice President-Product Development 1998...... 56,300 1997...... 26,800 INTERNET INFRASTRUCTURE 1996...... 13,500 Outside Consultants: eFORCE, Razorfish, USWeb Corp., Inventa Technologies Marketing Expenditures Site Maintenance: In-house staff 1999...... $242mn Hosting Arrangement: On-site server(s) 1998...... $155mn Access Provider: Qwest Communications, Genuity Inc. 1997...... $130mn Internet Connectivity: Multiple DS-3 lines Mirror Locations: One 1. Accounts at end of period. Hardware Platform: IBM, Sun Microsystems 2. Commission trades only, does not include mutual fund trades. Operating System: Solaris, AIX, JOSP Web Server Software: Netscape Enterprise Server 3.6 COMMENTS Commerce Platform: Proprietary applications, IBM Charles Schwab & Company is the largest online Websphere securities broker with more than 3 million online accounts Web Servers: 600 (approx.) IBM RS/6000 SP2 and Sun and almost $350 billion in online assets. The company’s servers initial online trading service was launched in 1996 after Database Platform: Oracle, IBM DB2 eight weeks of development by a 13-person task force. Database Servers: Web front-end links to back-end The initial service cost $2.4 million to develop and deploy. mainframe cluster (IBM and Hitachi) via RS/6000 Today, the company’s online channels include the middleware layer Schwab website for individual investors, the PC-based Personalization: Proprietary applications; Aptex SchwabLink for independent investment managers, and SelectResponse Velocity for highly active traders. The online channels Affiliate Management: Not used handled 68% of total trades in 1999 and 79% in the first Transaction Processing: Proprietary applications three months of 2000. At the end of March 2000, the Other Applications: Enterprise JavaBeans, Resonate load company had 3.7 million online accounts with $418 billion balancing software, BEA Systems WebLogic Enterprise, in assets. Epiphany E.4 customer management suite, Net.Genesis In 1999, the company’s Electronic Brokerage Technology Net.Analysis, Tivoli systems management software (EBT) Enterprise unit began an initiative to re-architect the Schwab website’s current C and CGI web trading code OPERATING BENCHMARKS with a component based design using Java technology and Total Revenue to migrate the current mainframe-based COBOL 1999...... $3.945bn applications to Java applications. The projected time 1998...... $2.736bn frame for the effort is three to five years. 1997...... $2.299bn In May 1999, the company introduced MyResearch 1996...... $1.851bn which enables customers to design their own research reports, and MySchwab which allows users to customize a personal Schwab home page with content provided by Online Customer Assets1 1999...... $348.7bn Excite@Home. 1998...... $174.1bn In July 1999, the company announced a partnership 1997...... $ 80.8bn with Spear, Leeds & Kellogg; Fidelity Capital Markets; 1996...... $ 41.7bn Donaldson, Lufkin & Jenrette; and Pershing to create a new electronic communications network (ECN) for extended-hours trading of NASDAQ and other exchange- Online Customer Accounts1 1999...... 3.3mn listed stocks. 1998...... 2.2mn In November 1999, the company launched a new online 1997...... 1.2mn investment bank -- Epoch Partners -- in partnership with 1996...... 0.6mn TD Waterhouse Group, Ameritrade Holding Corp., KPCB Holdings, Trident Capital Management, and Benchmark Capital Partners. Epoch will focus its activities on Total Customer Accounts1 1999...... 6.6mn information technology and Internet companies. 1998...... 5.6mn In November 1999, launched eConfirms, an e-mail 1997...... 4.8mn based subscription service that delivers trade confirmations 1996...... 4.0mn directly to customers electronically.

150 copyright  2000 by The Intermarket Group The eCommerce Almanac

In February 2000, the company acquired CyBerCorp, a provider of Internet-based trading services to day traders, Sharper Image Corp. for 13.7 million Schwab common shares. The company 650 Davis Street intends to use CyBerCorp’s order entry, routing and San Francisco, CA 94111, U.S.A. management technology to improve its services for active Tel. 415-445-6000 traders. In March 2000, Schwab and the British bank, Barclays Fax 415-445-1574 PLC, announced plans to develop and operate an automated foreign exchange facility for investors who Unique Visitors (March 2000): 414,000 trade securities denominated in different currencies. The Reach: 0.6% service, dubbed FX facility, will only be available to Rank: 1,787 Schwab’s international customers. The two companies expect the service to launch in the fourth quarter of 2000. ORGANIZATION In April 2000, the company announced a $10 million Business Sector: General merchandise equity investment in online loan broker E-Loan and Founded: 1977 received warrants for up 13.1 million additional E-Loan Employees: 1,400 total (36 IT and web staff) shares. The two companies also inked a four-year Offline Activity marketing agreement under which Schwab will refer its Storefronts: 90 in 28 states and Washington, D.C. online customers to E-Loan for various lending services. Catalogs Mailed: 47.6 million Facilities: • San Francisco, CA headquarters • Little Rock, AR distribution facility and call center Telecenter: One in-house call center; outsourced call center services used during peak seasons Ownership: Public Trading Symbol: SHRP (NASDAQ) Major Shareholders: • Richard Thalheimer, CEO (41%) Shareholder Equity: $77.1 million Profitable: Yes ($9.325 million profit for FY ’00)

WEBSITE OVERVIEW Website: www.sharperimage.com Site Launch: April 1995 Site Type: Business-to-consumer Business Model: Fixed pricing and auction/negotiated pricing Site Size: 2,000 (approx.) products Languages: English Accepts Advertising: No Site Features: General help, contextual help, one-click ordering/quick buy Back-end Integration: Access to customer account information, order processing, and payment processing are integrated into the website; web access to order status and shipment tracking planned.

MARKETING Media: Radio and television advertising, newspaper advertising, consumer and business periodical advertising, direct mail Partnerships: • America Online Inc. (proprietary dial-up service) • America Online Inc. (www.aol.com) • America Online Inc. (www.netscape.com) • America Online Inc. (www.compuserve.com)

Sharper Image Home Page Access Provider: Exodus Communications Mirror Locations: None Hardware Platform: Sun Microsystems Operating System: Solaris UNIX Web Server Software: Apache Commerce Platform: Evergreen Internet Ecential Web Servers: Multiple Sun Enterprise 450 servers Database Platform: Oracle Database Servers: Two Sun Enterprise 450 servers Personalization: Not used Affiliate Management: LinkShare Payment Processing: Evergreen Internet Ecential; proprietary back-end application Other Applications: F5 Networks BIG-IP load balancing software, OpenSite Technologies Open Site Merchant Edition, RedCart Universal Shopping Cart, Digital Impact Merchant Mail, Shells Interactive 3D Dreams, Broadbase customer data analysis suite, Macromedia Shockwave

OPERATING BENCHMARKS Total Revenue1 2000...... $294.4mn 1999...... $243.1mn 1998...... $216.8mn

Online Revenue1 2000...... $28.5mn 1999...... $ 4.9mn 1998...... $ 1.6mn

Average Online Order Value • Catalog City (www.catalogcity.com) 2000...... $ 97.00 • Excite@Home (www.home.com) 1999...... $140.00 • GiftCertificates.com (www.giftcertificates.com) 1998...... $111.00 • giftpoint.com (www.giftpoint.com) • Lycos Inc. (www.lycos.com) Total Advertising Expenditures1 • Microsoft Corp. (www.msn.com) 2000...... $37.99mn • MyPoints.com Inc. (www.mypoints.com) 1999...... $27.40mn • Yahoo! Shopping (www.yahoo.com) 1998...... $22.80mn Affiliates Program: sharperimage.com Affiliate Program Number of Affiliates: n/a 1. Fiscal year ending January 31 Commission Rate: 10% -14% based on total monthly order value COMMENTS The Sharper Image is a multi-channel retailer of specialty products in electronics, recreation and fitness, MANAGEMENT Anthony Farrell, Senior Vice President of Creative personal care, housewares, travel, toy, and gift categories. Services Approximately two-thirds (64%) of the company’s fiscal Greg Alexander, Senior Vice President of MIS year 2000 revenues were generated through its 89 physical Davia Kimmey, Senior Vice President of Marketing storefronts, 22% were generated through its direct mail Meredith Medland, Director of Internet Marketing catalog, and the balance (14%) was generated through its Peter Park, Lead Digital Architect online storefront. At the end January 2000, the company had a customer list of more than 10 million individuals. INTERNET INFRASTRUCTURE The sharperimage.com site was launched in April 1995 Design Consultants: Evergreen Internet, Inc. and an auction site, auction.sharperimage.com, was Site Maintenance: In-house staff and outside consultants launched in February 1999. The company uses its auction Hosting Arrangement: Co-located server(s) site for price discovery in new products, to liquidate

152 copyright  2000 by The Intermarket Group The eCommerce Almanac closeout products, and to move returned, repackaged, and refurbished merchandise. SportsLine.com, Inc. th The company’s Corporate Marketing Division also 6340 N.W. 5 Way employs the Internet in its operations. The unit has Ft. Lauderdale, FL 33309, U.S.A. established online partnerships with Merrill Lynch, Tel. 954-351-2120 American Express, Dell, CitiGroup, United Airlines, Microsoft, Boeing, and Hilton Hotels to support their Fax 954-776-4745 employee incentive and client rewards programs. The Company reports that its Internet sales were Unique Visitors (March 2000): 5,572,000 profitable during the last fiscal year because it incurs only Reach: 8.2% incremental costs related to the online channel. The Rank: 68 company leverages existing catalog fulfillment and customer service operations in servicing its online ORGANIZATION customers. Online customers are also provided an option Business Sector: Internet Sports Content of exchanging or returning products purchased through the Founded: February 1994 Internet at any Sharper Image store if that is more Employees: 500+ (web development staff: 97) convenient than returning it by U.P.S. Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Ft. Lauderdale, FL headquarters • Chicago, IL sales office • New York, NY sales office • San Francisco, CA sales office • Los Angeles, CA sales office • Denver, CO sales office • Tacoma, WA editorial office • New York, NY content development office • London, U.K. Sports.com Ltd. headquarters Telecenter: One in-house call center Ownership: Public Trading Symbol: SPLN (NASDAQ) Major Shareholders • CBS Corp.. (18.6%) • Massachusetts Financial Services Co. (10.4%) • MediaOne Interactive Services, Inc. (6.8%) • Michael Levy, Chairman and Chief Executive Officer (5.7%) • Reuters NewMedia Inc. (1.9%) Financing: $333.879 million Profitable: No ($17.097 million loss for FY ’99)

WEBSITE OVERVIEW Website: cbs.sportsline.com Site Launch: August 1995 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 1+ million content pages Languages: English; company’s Sports.com property is published in English, French, German, Italian, and Spanish Accepts Advertising: Yes Site Demographics: 76% male/24% female, 62% college graduates, 69% married, average age 35-44, average household income $60-75,000 Site Features: General help, contextual help, threaded discussions, and real-time customer-to-customer chat

SportsLine.com Home Page Back-end Integration: Access to customer account information, order processing, and payment processing are integrated into website.

MARKETING Media: Radio and television advertising, consumer and business periodical advertising, direct mail Partnerships: • America Online (Proprietary dial-up service) • America Online (www.aol.com) • America Online (www.netscape.com) • CBS Corp. (www.cbs.com) • Excite@Home (www.home.com) • Financial Times (www.ft.com) MVP.com (www.mvp.com) • Intel Corp. (www.intel.com) • Time Warner Road Runner (www.rr.com) • Microsoft Corp. (Active Channel placement) • Major League Baseball • PGA TOUR Affiliates Program: CBS SportsLine News Affiliate Program (content sharing program) Number of Affiliates: 1,000 Commission Rate: None

MANAGEMENT Michael Levy, Chairman, Chief Executive Officer and President. Previously served as president and CEO of Lexicon Corp. and as chairman and CEO of Sports-Tech International, Inc. Mark J. Mariani, President-Sales & Marketing. Previously served as executive vice president of sports sales for Turner Broadcasting Sales, Inc., senior vice president and national sales manager for CNN, vice president for CNN sales Midwest, and account executive for CBS affiliate WBBM in Chicago, Illinois. Andrew S. Sturner, President-Business & Corporate Development. Previously served as vice president of business development for MovieFone, Inc., an interactive telephone service company, president and co-founder of Interactive Services, an interactive audiotext development company, and bankruptcy associate at the law firm of Stroock & Stroock & Lavan Kenneth W. Sanders, Chief Financial Officer. Previously served as senior vice president and CFO of Paging Network,Inc., executive vice president and CFO of CellStar Corp., and in various positions with KPMG Peat Marwick, including audit partner. Dan Leichtenschlag, Senior Vice President, Operations. Previously served in various technical and management capacities at General Electric Corp., including manager of systems development for Genie, the company's on-line service, and manager of UNIX software development. Thomas Jessiman, Managing Director, Sports.com. Previously served as director of business development for US WEST Media Group's Interactive Services Division,

154 copyright  2000 by The Intermarket Group The eCommerce Almanac director of business development in the US WEST Site Traffic (page views per day)1 Multimedia Group, and a manager in IBM Corp.’s 1999 (Q4) ...... 11.6mn Multimedia Group. 1998 (Q1) ...... 4.3mn 1997 (Q4) ...... 2.7mn INTERNET INFRASTRUCTURE Design Consultants: None 1. Traffic data provided by company Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) and COMMENTS co-located server(s) SportsLine.com is one of the Internet’s leading sports Access Provider: UUNET/MCI Worldcom, Exodus content companies, providing both free and subscription Communications content through its www.sportsline.com and Internet Connectivity: Multiple DS-3 lines plus several www.sports.com sites as well as syndicated online content hundred Mbps bandwidth at Exodus co-located site and three syndicated radio shows. The company generated Mirror Locations: Two approximately 9% of its 1999 revenues from membership Hardware Platform: Sun Microsystems, IBM, Compaq, and subscription fees and 50% from advertising. VA Linux In January 1998, the company acquired Golfweb, a golf Operating System: Solaris UNIX, Microsoft NT, Linux content site, for 844,490 shares of SportsLine.com Web Server Software: Netscape Enterprise Server on Sun, common stock. In June 1998, acquired the online golf Apache on Linux, Microsoft IIS 4.0 on NT equipment retailer, International Golf Outlet for $2 million Commerce Platform: Microsoft Site Server Commerce -- $350,000 in cash and 46,924 shares of Sportsline.com Edition common stock -- plus an additional 42,658 shares if certain Web Servers: Multiple Sun, VA Linux, and Compaq revenue and earnings targets were met; 14,220 of those servers shares were issued at the end of 1999. In May 1999, Database Platform: Oracle, SQL Server 7 acquired Golf Club Trader for approximately $7 million in Database Servers: Multiple Sun servers for Oracle, IBM SportsLine.com common stock (195,850 shares). In RS/6000 for SQL 7 Server December 1999, acquired Daedalus World Wide Corp., Personalization: Net Perceptions Group Lens which offers sports-related fantasy products, for Recommendation Engine approximately $31.78 million -- $4 million in cash and Affiliate Management: Not used $27.78 million in SportsLine.com common stock (599,998 Payment Processing: Signio shares). Other Applications: Internet Profiles (I/PRO) traffic In May 1999, the company spun off its European auditing, BEA Systems WebLogic, Vignette Story Server, operations into Sports.com Ltd. and also announced the LivePerson real-time customer service chat purchase of Sportsweb for an undisclosed amount. In June 1999, Sports.com acquired the sports division of Infosis OPERATING BENCHMARKS Group for an undisclosed amount. Total Revenue In December 1999, the company announced the transfer 1999...... $60.3mn of its online sports products and memorabilia e-commerce 1998...... $30.6mn business to sports retailer MVP.com, a start-up involving 1997...... $12.0mn sports stars Michael Jordan, John Elway, and Wayne Gretsky. As part of the deal, the company received a Membership Revenue minority position in MVP.com while MVP.com would 1999...... $5.6mn continue to operate an online storefront on the 1998...... $5.0mn SportsLine.com site and agreed to pay a minimum of $120 1997...... $2.7mn million in promotional fees to SportsLine.com over a 10- year period. The agreement included three of the Sales & Marketing Expenditures company’s subsidiaries, International Golf Outlet, Golf 1999...... $36.4mn Club Trader, and TennisDirect.com. The SportsLine.com 1998...... $20.5mn e-commerce businesses transferred in the deal generated 1997...... $14.0mn $16.49 million in revenue during 1999, up from $3.6 million in 1998 and $1.05 million in 1997. Development Expenditures 1999...... $1.59mn 1998...... $1.31mn 1997...... $2.54mn

Staples.com Staples.com Home Page 500 Staples Drive Framingham, MA 01702, U.S.A. Tel. 508-253-5000 Fax 508-370-8989

Unique Visitors (March 2000): 1,130,000 Reach: 1.7% Rank: 505

ORGANIZATION Business Sector: Office supplies Founded: 1999 Employees: 140 Offline Activity Storefronts: 1,129 in U.S., Canada, U.K., and Germany (Staples, Inc.) Catalogs Mailed: n/a Facilities: • Framingham, MA headquarters • Plus use of 29 Staples, Inc distribution facilities, including: • Hagerstown, MD distribution facility • Killingly, CT distribution facility • Putnam, CT distribution facility • Terre Haute, IN distribution facility • Charlotte, NC distribution facility • Rialto, CA distribution facility • Stockton, CA distribution facility Ownership: Private (subsidiary of Staples, Inc.; IPO pending) Back-end Integration: Access to customer account Trading Symbol: SDOT (NASDAQ) information, order history, and order status are integrated Major Shareholders: into website. • Staples, Inc. (49%) • General Atlantic Partners (16.8%) MARKETING • Highland Capital Partners (11.2%) Media: Staples.com leverages the existing advertising • Jeanne Lewis, President (7.4%) campaign of Staples Inc. in broadcast radio and television, • Greylock (6.7%) newspaper circulars, consumer and business periodicals, Financing: $52.3 million in four rounds and direct mail. Profitable: No ($16.358 million loss for FY ’00) Partnerships: • Ariba Network (www.ariba.com) WEBSITE OVERVIEW • CNN Inc. (www.cnn.com) Website: www.staples.com, www.stapleslink.com, • Commerce One, Inc. (BuySite software) www.quillcorp.com • Intelisys Electronic Commerce, LLC (i-Procurement Site Launch: November 1998 software) Site Type: Business-to-business • Oracle Corp. (www.oracleexchange.com) Business Model: Fixed pricing • Register.com (www.register.com) Site Size: 130,000 (approx.) product SKUs, including • Yahoo! Geocities (www.geocities.com) 100,000 downloadable software titles • Languages: English Yahoo! Inc. (www.yahoo.com) Accepts Advertising: No Affiliates Program: Staples.com Affiliate Program Site Features: General help, low bandwidth version No. of Affiliates: n/a Commission rate: 4-10% of sales based on cumulative value of quarterly sales

156 copyright  2000 by The Intermarket Group The eCommerce Almanac

MANAGEMENT Bronner Slosberg Humphrey (now Digitas). B.A. from the Jeanne Lewis, President. Previously served in various University of Michigan. positions at Staples, Inc., including executive vice Jackie Shoback, Vice President--Operations. Previously president--marketing, senior vice president--marketing and served as vice president--call center operations for Staples small business, vice president/divisional merchandise Direct, Staples, Inc.’s catalog division. B.A. from manager, director of operations, and director of sales and Wellesley College and M.B.A. from Harvard Business marketing. B.A. from Wellesley College and M.B.A. from School. Harvard Business School. Kevin Dempsey, Vice President--Merchandising. INTERNET INFRASTRUCTURE Previously served as vice president--international Design Consultants: Fry Multimedia merchandising for Staples in Brussels, vice president-- Site Maintenance: In-house staff import buying and product development of Staples, and Hosting Arrangement: Co-located servers vice president merchandising and a founding member of Access Provider: Digex (staples.com), EMC Corp. the management team for Staples' Canadian operation, (stapleslink.com) Business Depot. B.A. from The University of Western Mirror Locations: None Ontario, Canada. Hardware Platform: Intel Pentium Anne Marie Keane, Vice President--Business-to-Business Operating System: Windows NT Electronic Commerce. Previously served in a variety of Web Server Software: Microsoft IIS 4.0 positions in Staples, Inc.’s marketing, merchandising and Commerce Platform: NetResults ProShop/B strategy organizations. B.A. from Dartmouth College and Database Platform: Microsoft SQL Server 7 M.B.A. from Harvard Business School. Personalization: Not used Christine Komola, Chief Financial Officer. Previously Affiliate Management: Be Free BFAST served as vice president--planning, margin and control for Payment Processing: Proprietary POS system Staples, Inc. and prior to that for eight years at Ernst & Other Applications: Kana Solution customer support, Young, LLP. B.S. from Miami University in Oxford, Intell-A-Check direct-debit service Ohio. Jeffrey Levitan, Sr. Vice President - Strategic Planning & OPERATING BENCHMARKS Business Development. Previously employed by the Total Revenue1 Boston Consulting Group, where he developed growth 2000...... $94.35mn strategies for companies in the consumer goods, 1999...... $16.89mn telecommunications and pharmaceutical industries, and in 1998...... $ 3.71mn a variety of marketing positions at the Gillette Company and Stride Rite’s Children's Group. Graduate of Cornell Marketing Expenditures1 University and M.B.A. from the Wharton School at the 2000...... $27.06mn University of Pennsylvania. 1999...... $ 2.06mn J.B. Lyon, Director - Staples.com. Previously served as a 1998...... $ 0.64mn senior associate of strategic planning for Staples Inc., founder and manager of Uncle Dave's Kitchen, a Development Expenditures1 nationally-distributed pasta sauce and condiment packaged 2000...... $4.05mn foods company, and a financial advisor with Cooper's and 1999...... $0.94mn Lybrand. B.A. from Tufts University and M.B.A. from 1998...... $0 Harvard Business School. Michael J. Ragunas, Chief Information Officer and Sales to Repeat Customers1 Director - Strategic Technology & Systems Architecture. 2000...... 25% Previously served in various other positions within the 1999...... n/a Information Systems Group of Staples Inc. and as general manager in the Washington, DC metropolitan area. Also 1. Fiscal year ending January 30. directed development of Staples.com’s Internet-based electronic commerce applications, including the continuing COMMENTS maintenance and improvement of the site's technology. Staples.com is a subsidiary of Staples Inc., established Graduate of Harvard College. in December 1998, approximately one month after the Kelly Mahoney, Chief Marketing Officer. Previously company launched its commerce-enabled website. The served as chief marketing officer at Arnold Direct, the unit, and its Staples.com website, primarily target the small integrated marketing division of Arnold Communications, business market. Staples.com also operates and as senior vice president at direct marketing firm QuillCorp.com, an offices supplies website targeting small and mid-size companies, and StaplesLink.com which is a web-based extranet service that offers large organizations

copyright  2000 by The Intermarket Group 157 The eCommerce Almanac features such as customized pricing, payment terms, usage reporting, and account management. Tower Records The unit received approximately $2.7 million in MTS Inc. funding from its corporate parent during 1997 and 1998 2500 Del Monte Street and $29.9 million during 1999; an additional $19.6 million West Sacramento, CA 95691, U.S.A. was raised from venture capitalists through a private placement in 1999. Staples filed a registration statement Tel. 916-373-2500 with the U.S. Securities and Exchange Commission on Fax 916-373-2535 February 18, 2000 for an initial public offering of approximately $250 million in Staples.com common stock. Unique Visitors (March 2000): 363,000 The unit’s gross revenue for the first quarter ending April Reach: 0.5% 29, 2000 was $75.36 million with a before-tax loss of Rank: 2,045 $39.72 million. The number of repeat customers expanded by 75% during the quarter to 143,500. ORGANIZATION The unit purchased a 10% minority interest in Business Sector: Music and Videos/DVDs BizBuyer.com, an online business-to-business Founded: 1960 marketplace, for $19 million in February 2000 and Employees: 7,500 total minority interests in two other web companies in May Offline Activity 1999, investing $7 million in the domain name registration Storefronts: 218 in the U.S. and 16 other countries company Register.com and $3.5 million in the wireless Catalogs Mailed: None phone shopping site Point.com. Facilities: The Staples.com site includes a Business Solutions • West Sacramento, CA headquarters Center which the company intends to use as a business-to- • West Sacramento, CA distribution center business trading hub -- in conjunction with strategic Ownership: Private partner BizBuyer.com -- which enables customers to Trading Symbol: None request quotes from a network of over 20,000 service Major Shareholders: providers offering over 40 services and to provide • Russell Solomon, President and CEO messaging boards and other interactive features. • Michael Solomon, Vice President Staples.com is building the trading hub through a Shareholder Equity: $118.113 million partnership with several service providers. Users of the Profitable: No ($8.218 million loss for 12-months ended Office Services feature have access to hosted intranet, E- 1/31/00) mail, online conferencing, and document sharing services from HotOffice.com. An Internet Services feature provides WEBSITE OVERVIEW access to domain name search and registration capabilities. Website: www.towerrecords.com, Payroll management services are offered through www.towereurope.com, www.towerrecords.co.jp Claricom, which was recently acquired by Staples. Site Launch: November 1996 Wireless telephone services and long-distance plans will Site Type: Business-to-consumer be available through a partnership with Point.com. Business Model: Fixed pricing Staples.com has agreements with its parent that enable Site Size: 450,000 titles (approx.) it to conduct cross-marketing, co-promotion, and other Languages: English, Japanese types of customer acquisition programs which leverage Accepts Advertising: No Staples' database of approximately 8,000,000 business Site Features: General help, one-click ordering/quick buy, customers. The company is also able to leverage the 250 foreign language product information and order pages sales representatives of Staples’ catalog business and the Back-end Integration: Access to customer account 505 sales representatives of Staples’ contract stationers information, order history, inventory availability, order business. There are also plans to generate web sales by processing, payment processing, and order status are locating electronic kiosks in Staples’ retail stores, enabling integrated into website. customers to purchase products online when they’re not immediately available in the store itself. A Staples MARKETING Dividend$ Program is available to all business customers, Media: Television and radio advertising, newspaper enabling them to earn rebates up to 2.5% on purchases advertising made both online and offline. Dividend$ rebates can be Partnerships: used to make additional purchases at Staples.com or any • America Online (proprietary dial-up service) Staple storefront location. • America Online (www.aol.com) • America Online (www.netscape.com)

158 copyright  2000 by The Intermarket Group The eCommerce Almanac

Tower Records Home Page Kevin Ertell, Internet Technologies Manager Stewart Stearns, Online Development Manager

INTERNET INFRASTRUCTURE Design Consultants: eMerging Media, USWeb/CKS Site Maintenance: In-house staff Hosting Arrangement: On-site server(s) Access Provider: Global Crossing, Sprint Internet Connectivity: Two T-1 lines Mirror Locations: None Hardware Platform: Intel Pentium Operating System: Microsoft Windows NT 4 Web Server Software: Microsoft IIS 4.0 Commerce Platform: Microsoft Site Server Commerce Edition Database Platform: Informix Personalization: Net Perceptions Group Lens Recommendation Engine, Microsoft Site Server Commerce Edition Affiliate Management: Commission Junction Payment Processing: Merchant Technical Systems, CyberCash InstaBuy Other Applications: RedCart Universal Shoppng Cart, Mercado IntuiFind Merchant Catalog, Merant Egility Data Integration middleware, Liquid Audio Liquid Distribution, DiscoverMusic.com music clips, Digital Impact e-mail marketing

OPERATING BENCHMARKS Total Revenue1 2 2000 (6 mos.)...... $0.587bn 1999...... $1.026bn 1998...... $1.008bn 1997...... $0.992bn

1. Based on sales from all sources because company does not break out data for web activity 2. Fiscal year ending July 31

COMMENTS Tower Records was the first bricks-and-mortar music retailer to begin selling online, launching a storefront on America Online in 1995. The company’s web storefront was launched in November 1996 with a selection of music CDs and related products; videos and DVDs were added in 1998. In 1999, the online business was transferred into a • subsidiary company, Tower Direct, although Tower America Online (www.compuserve.com) Records still provides fulfillment services and receives • Flooz.com Inc. (www.flooz.com) revenues from Tower Direct. • MyPoints.com Inc. (www.mypoints.com) The current version of the company’s site was launched Affiliates Program: TowerRecords.com Affiliates Program in June 1999, introducing database-driven dynamic pages Number of Affiliates: n/a along with new content and services such as reviews, Commission Rate: 4% of sales from linked items columns, a create-your-own CD offering, and a "voyeur" service that queries the site's database to report on what MANAGEMENT other shoppers are buying at the moment. In September Mike Farrace, Vice President of Worldwide Marketing 1999, the company added used CDs to the site and Kevin Winnik, Director of New Product & Sideline currently offers more than 30,000 titles. Merchandise

Toysrus.com, Inc. Toysrus.com Home Page Toys “R” Us, Inc. 461 From Road Paramus, NJ 07652, U.S.A. Tel. 201-262-7800 Fax 201-845-0973

Unique Visitors (March 2000): 1,133,000 Reach: 1.7% Rank: 591

ORGANIZATION Business Sector: Toys Founded: 1948 Employees: 76,000 (web unit: 475) Offline Activity Storefronts: 1,552 across U.S. Catalogs Mailed: n/a Facilities: • Montvale, NJ headquarters • Fort Lee, NJ Toysrus.com East Coast headquarters • San Francisco, CA Toysrus.com West Coast office • Memphis, TN website distribution center • Mira Loma, CA website distribution center • Chambersburg, PA website distribution center • Parsippany, New Jersey, data center • 11 Toys R Us and 4 Kids R Us distribution centers located across the U.S. and 8 internationally • America Online (www.netscape.com) Ownership: Public • America Online (www.compuserve.com) Trading Symbol: TOY (NYSE) • Major Shareholders: n/a America Online (www.digitalcity.com) • Shareholder Equity: $3.68 billion coolsavings.com (www.coolsavings.com) • Profitable: Yes ($279 million profit for FY ’00) employeesavings.com (www.employeesavings.com) • Microsoft Corp. (www.msn.com) WEBSITE OVERVIEW • Microsoft Corp. (www.hotmail.com) Website: www.toysrus.com, www.imaginarium.com • MyPoints.com Inc. (www.mypoints.com) Site Launch: 1996; June 1998 (e-commerce site) • Yahoo! Inc. (www.yahoo.com) Site Type: Business-to-consumer Affiliates Program: Toys.rus.com Affiliate Program Business Model: Fixed pricing Number of Affiliates: n/a Site Size: 5,000 (approx.) product SKUs Commission Rate: 5-12.5% based on value of sale Languages: English Accepts Advertising: No MANAGEMENT Site Features: General help, one-click ordering/quick-buy John Barbour, Chief Executive Officer Back-end Integration: Access to customer account Jonathan Foster, Executive Vice President and Chief information, order history, inventory availability, order Operating Officer processing, order status, and shipment tracking are Joel Anderson, Vice President - General Manager integrated into website. Raiymond Arthur, Vice President - Finance and Controller MARKETING Lawrence McGuire, Vice President - Human Resources Media: Television advertising, newspaper advertising, John Sullivan, Vice President - General Manager consumer periodical advertising, direct mail Gregg Treadway, Vice President - Logistics Partnerships: Robert Hyland, Director of Technology • America Online (Proprietary dial-up service) • America Online (www.aol.com)

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INTERNET INFRASTRUCTURE The Toysrus.com unit reported $49 million in sales Design Consultants: G. Triad Development, Quadrix during the 2000 fiscal year ending January 29, 2000 and a Solutions, MarchFirst loss of $86 million. The company reported $2.319 billion Site Maintenance: In-house staff in revenue for the first quarter ending April 29, 2000 and a Hosting Arrangement: Co-located server(s) profit of $215 million, including $315 million in proceeds Access Provider: Global Crossing Frontier GlobalCenter from the IPO of its Japanese subsidiary. The Toysrus.com Mirror Locations: None unit reported $8 million in first quarter revenue and a Hardware Platform: Intel Pentium pretax loss of $14 million. Operating System: Microsoft Windows NT 4 The Toysrus.com unit leverages its parent’s bricks-and- Web Server Software: Microsoft IIS 4.0 mortar presence by allowing customers to return Commerce Platform: Proprietary applications, Cold merchandise to Toys “R” Us storefront locations. Plans Fusion applications are also in the works to place kiosks throughout the Database Platform: Microsoft SQL Server company’s retail locations, enabling customers to access Personalization: Not used the Toysrus.com site and order items that are out of stock Affiliate Management: LinkShare or unavailable in the store. The Internet unit also leverages Payment Processing: Proprietary back-end POS numerous marketing assets of its parent, including a application database of more than 62 million families, a sizable Other Applications: Kana Solution customer support, national advertising budget, and various in-store Allaire Cold Fusion promotions. In October 1999, the company announced a partnership OPERATING BENCHMARKS with Tutornet.com, an online tutoring service, to add the Total Revenue1 2 educational site’s content and services to the Toysrus.com 2000...... $11.86bn site. The Tutornet service employs online chat and 1999...... $11.17bn whiteboarding technology to provide interactive, live 1998...... $11.04bn teacher moderated tutoring to students in math and science courses. 1. Fiscal year ending January 30 In June 2000, the company announced a partnership 2. Based on sales from all sources with the children’s cable TV network Nickelodeon to launch a Nickelodeon boutique content channel on the COMMENTS Toysrus.com Web site. The company also agreed to Toys “R” Us is the largest toy retailer in the U.S. with acquire the inventory of Viacom’s recently-closed online more than 1,500 storefront locations, including 710 Toys toy-retailing venture, Red Rocket. Viacom is the parent “R” Us stores, 205 Kids "R" Us children’s clothing stores, company of Nickelodeon. 131 Babies "R" Us toddler’s stores, and 40 Imaginarium educational specialty stores. The company also operates 462 toy stores outside the U.S. The Toysrus.com online storefront was launched in June 1998. In October 1999, a redesigned and reengineered version of the site was launched. The Internet unit was spun out into an independent subsidiary in April 1999. An equity investment from Benchmark Capital was announced at the same time but ultimately collapsed over conflicts about the specific terms of the deal. The company ultimately sold a 20% minority stake to Softbank Venture Capital for $57 million in February 2000. Two Softbank venture funds concurrently purchased $10 million in warrants to acquire 1.2 million Toys "R" Us common shares at $13.00 per share. The Blackstone Group, KKR & Company, and Evercore Partners have also committed to minority investments in Toysrus.com During the 1999 holiday shopping period, the Toysrus.com site was the second busiest toy site, after eToys.com. Unique visitors in November and December 1999, according to PC Data, were 4.46 million and 3.10 million respectively.

Travelocity.com Inc. Travelocity.com Home Page 4200 Buckingham Blvd. Ft. Worth, TX 76155, U.S.A. Tel. 817-963-2923 Fax 817-963-8869

Unique Visitors (March 2000): 6,330,000* Estimated Reach: 9.4%* Extrapolated Rank: 56* * Combined traffic for travelocity.com and previewtravel.com domains

ORGANIZATION Business Sector: Travel services Founded: February 2000 Employees: 350 Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Ft. Worth, TX headquarters • New York, NY corporate offices • San Antonio, TX customer service center • San Francisco, CA corporate offices and customer service center • Rancho Cordova, CA customer service center Telecenter: Three in-house call centers with 400 contract representatives Ownership: Public Trading Symbol: TVLY (NASDAQ) Major Shareholders: • The Sabre Group, Inc. (70%) Shareholder Equity: $334.738 million Profitable: No ($118.427 million proforma operating loss MARKETING for FY ’99) Media: Radio and television advertising, business periodical advertising WEBSITE OVERVIEW Partnerships: Website: www.travelocity.com, www.previewtravel.com • America Online (proprietary dial-up service) Site Launch: March 1996 • America Online (www.aol.com) Site Type: Business-to-consumer, business-to-business • America Online (www.netscape.com) Business Model: Fixed pricing • America Online (www.digitalcity.com) Site Size: 420 airlines, 45,000 hotel properties, 50 car • America Online (www.compuserve.com) rental agencies, 70,000+ vacation packages, 200,000+ • Excite@Home (www.home.com) content pages • Excite@Home (www.excite.com) Languages: English • Go Network (www.go.com) Accepts Advertising: Yes • Site Demographics: 52% Male/47% Female, 70% Lycos Inc. (www.lycos.com) • married, 40% college educated, average household income MyWay.com (www.myway.com) • range $50-75K, average age range 18-34 OracleMobile (www.oraclemobile.com) Site Features: General help, contextual help, quick-buy, • Palm Computing (www.palm.com) threaded discussions, customer created content • Rezworks Corp. (www.vacationspot.com) Back-end Integration: Access to customer account • Time Warner Road Runner (www.rr.com) information, inventory availability, order processing, • Yahoo!, Inc. (www.yahoo.com) payment processing, and order status integrated into • Visa International website • British Airways

162 copyright  2000 by The Intermarket Group The eCommerce Almanac

• Sabre Interactive has also developed co-branded Transaction Revenue1 Travelocity web sites for more than 12,000 travel 1999 (Q4) ...... $23.40mn agents. 1999 (Q3) ...... $19.38mn Affiliates Program: Travelocity.com Affiliate Program 1999 (Q2) ...... $14.71mn Number of Affiliates: n/a 1999 (Q1) ...... $12.80mn Commission Rate: $2.00 per ticket booked 1998...... $29.33mn

MANAGEMENT Marketing Expenditures1 Terrell Jones, President and Chief executive Officer 1999 (Q4) ...... $20.20mn Ramesh Punwani, Chief Financial Officer 1999 (Q3) ...... $20.82mn Mike Stacy, Senior Vice President-Consumer Marketing 1999 (Q2) ...... $15.13mn Jim Marsicano, Executive Vice President, Sales and 1999 (Q1) ...... $12.04mn Service 1998...... $33.36mn Dave D'Elia, Senior Vice President, Customer Service Chris Vasiliou, Senior Vice President, International Technology Expenditures1 Mamie Millard, Vice President Applications Development 1999 (Q4) ...... $ 3.21mn Richard Pendergast, Director of Systems 1999 (Q3) ...... $ 3.04mn 1999 (Q2) ...... $ 2.93mn INTERNET INFRASTRUCTURE 1999 (Q1) ...... $ 2.93mn Design Consultants: None 1998...... $10.18mn Site Maintenance: In-house staff Hosting Arrangement: Co-located server(s) (reservations Registered Users (end of period)1 services), on-site server(s) (content) 1999...... 19.0mn Access Provider: Sprint Internet Services, InterNAP 1998...... 11.4mn Network Services, Level 3 Communications 1997...... 4.2mn Internet Connectivity: 200+mbps Mirror Locations: None 1. Proforma consolidated results for Travelocity and Preview Travel. Hardware Platform: Sun Microsystems, Silicon Graphics Operating System: Solaris UNIX, IRIX UNIX COMMENTS Web Server Software: Netscape Enterprise Server 3.6 Travelocity.com is a partnership created in February Commerce Platform: Netscape Commerce Server, 2000 through the merger of Sabre Interactive’s Travelocity Netscape Applications Server, proprietary applications unit with Preview Travel. Sabre, which contributed Web Servers: Multiple Sun E10000 Enterprise servers and Travelocity and $102.7 million in equity capital, ultimately 16-processor SGI 2000 servers controls 70% of the company while the former Application Servers: Multiple 16-processor SGI 2000 shareholders of Preview Travel (NASDAQ: PVTL) control servers the remaining 30%. The predecessor companies, Database Platform: Oracle; links to Sabre’s back-end Travelocity and Preview Travel were originally founded in IBM mainframe reservations system 1987 and 1995 respectively. Database Servers: SGI 2000 servers Proforma revenue for the merged companies during the Personalization: Net Perceptions GroupLens first quarter ending March 31, 2000 were $35.7 million Recommendation Engine, proprietary applications with a loss of $40.7 million. Affiliate Management: BeFree BFAST The merger of the two companies is intended primarily Payment Processing: Proprietary application to combine the customer support capabilities, technology Other Applications: NCR Teradata Active Warehouse, infrastructure, and back-end reservations systems of Netscape Communications Server, Cisco Load Director, Travelocity -- which are primarily outsourced to Sabre -- Kana Solution customer support, Vignette Story Server, with the content and community resources of Preview Mercury Interactive ActiveTest, OnDisplay CenterStage Travel. Post merger, the software and hardware for eContent, CyberCash InstaBuy destinations, vacations, and cruise reservations are located in what was previously Preview Travel’s San Francisco OPERATING BENCHMARKS computer center while airline, car rental, and hotel Total Revenue1 reservations systems continue to be located at Sabre’s 1999 (Q4) ...... $30.22mn computer center. Both companies expect to complete the 1999 (Q3) ...... $25.41mn process of integrating the content, features, and underlying 1999 (Q2) ...... $19.20mn technologies of their two websites by the third quarter of 1999 (Q1) ...... $16.11mn 2000. 1998...... $35.54mn The company has not translated any part of its website into any foreign languages, but it does operate localized

copyright  2000 by The Intermarket Group 163 The eCommerce Almanac versions for the Canadian market (www.travelocity.ca) and for the United Kingdom (www.travelocity.co.uk). Local Wal-Mart.com Inc. th customer service is provided through partnerships with 702 S.W. 8 Street Rider/BTI Travel in Canada and Hillgate Travel in the Bentonville, AR 72716, U.S.A. United Kingdom. The company’s Agency Locator feature Tel. 501-273-4000 enables customers in other countries to locate participating Sabre travel agencies where they can pick-up their tickets. Fax 501-273-1917 In addition to its own website, Travelocity.com also builds and hosts sites for travel agents who use the Sabre Unique Visitors (March 2000): 1,601,000 reservations service. The company has built more than Reach: 2.4% 12,000 such sites, including cheaptickets.com. Rank: 381 The company has partnered with InfoSpace.com to build a co-branded Travelocity Shopping area on its ORGANIZATION website. In December 1999, the company partnered with Business Sector: General merchandise Club Photo to create the Travelocity.com Photo Gallery, Founded: 1962 (Wal-Mart Stores) an online photo-sharing service that enables customers to Employees: 1.14 million (Wal-Mart Stores) post and share travel photos and destination Offline Activity recommendations. In March 2000, announced an Storefronts: 1,784 Wal-Mart Stores; 3,110 total agreement with Hotel Reservations Network (HRN) to worldwide integrate a variety of HRN's negotiated discounts into Catalogs Mailed: None Travelocity.com's own hotel offerings. The agreement Facilities (Wal-Mart Stores): also granted warrants to Travelocity.com which entitle it to • Bentonville, AR headquarters purchase an undisclosed quantity of HRN’s common • Tulsa, OK back-up data center stock. In April 2000, announced a five-year, $200 million • 51 distribution centers worldwide. agreement with America Online which designated the Telecenter: In-house call center operated by Wal-Mart company as the exclusive travel reservations service for Stores the AOL service, AOL.com, AOL Digital City, and Ownership: Private (subsidiary of Wal-Mart Netscape Netcenter. Stores Inc. - NYSE: WMT) Trading Symbol: None Major Shareholders: • Wal Mart Stores Inc. • Accel Partners Shareholder Equity: $25.83 billion (Wal-Mart Stores) Profitable: Yes (Wal-Mart Stores: $5.38 billion profit for FY’ 00)

WEBSITE OVERVIEW Website: www.walmart.com, www.wal-mart.com Site Launch: July 1996; re-launch January 2000 Site Version: 3.0 Site Type: Business-to-consumer Business Model: Fixed pricing Site Size: 600,000 SKUs (approx.) in 24 product categories plus photo and travel services Languages: English Accepts Advertising: No Site Features: General help, one-click ordering/quick-buy Back-end Integration: Access to customer account information, order history, inventory availability, order processing, payment processing, order status, and shipment tracking are integrated into website.

MARKETING Media: Television advertising, newspaper advertising, consumer periodical advertising

164 copyright  2000 by The Intermarket Group The eCommerce Almanac

Wal-Mart.com Home Page Personalization: BroadVision One-To-One Retail Commerce Affiliate Management: Not used Payment Processing: Proprietary back-end legacy application Other Applications: Coremetrics eLuminate visitor analysis, Applied Graphics Technologies Digital Link image management

OPERATING BENCHMARKS Total Revenue1 2 2000...... $165.01bn 1999...... $137.63bn 1998...... $117.96bn

Total Advertising Expenditures1 2 2000...... $523mn 1999...... $405mn 1998...... $292mn

1. Revenue from all sources because company does not break-out sales of Walmart.com, Inc. unit 2. Fiscal year ending January 31

COMMENTS Walmart.com is the online subsidiary of Wal-Mart Stores, the world’s largest retailer with more than one million employees and more than 90 million customers. The online unit was spun-off into the current stand-alone Partnerships: subsidiary in January 2000. Wal-Mart Stores is the • America Online (proprietary dial-up service) majority owner of the unit and venture capitalists Accel • America Online (www.aol.com) Partners is a minority investor. The two companies plan to • America Online (www.netscape.com) locate the unit in Palo Alto, California, however, most of • America Online (www.compuserve.com) the operation is still centered in Bentonville, Arkansas. Affiliates Program: None Wal-Mart launched its first website in July 1996. The current site was launched in January 2000 after an eight MANAGEMENT month-long redesign and an estimated $35 million Jeanne Jackson, President - Walmart.com investment, including $22 million in outside consulting Greg Penner, Vice President of Business Development - and development expenses, $6 million for development Walmart.com and production hardware, and $4 million for software licenses. The current site includes more than 600,000 INTERNET INFRASTRUCTURE SKUs across 24 product categories, an online travel Design Consultants: Cambridge Technology Partners, agency, and a photo center; plans are in the works to add Grey Interactive, Quantum Leap (Walmart.com travel site) an online pharmacy later in 2000. Content services Site Maintenance: In-house staff and outside consultants include an online gift registry, personalized calendars, and Hosting Arrangement: On-site server(s) a photo posting/sharing area. Access Provider: Southwest Bell Internet Services The company has worked with Cambridge Technology Internet Connectivity: Multiple shared DS-3 lines Partners to fully integrate the walmart.com site with its Mirror Locations: None existing mainframe-based order-fulfillment, credit-card Hardware Platform: Hewlett-Packard, IBM (back-end) processing, inventory, and content-management systems. Operating System: HP-UX UNIX, OS/390 This integration between the site and the systems which Web Server Software: Netscape Enterprise Server 3.6 support the company's brick-and-mortar stores enables Commerce Platform: BroadVision One-to-One Retail customers to pick-up and return items ordered online at Commerce any of the almost 1,800 Wal-Mart stores nationwide. Database Platform: IBM DB2 In December 1999, the company announced an agreement with America Online to offer in-store customers a co-branded Wal-Mart/AOL version of the CompuServe

copyright  2000 by The Intermarket Group 165 The eCommerce Almanac service and to distribute a version of the AOL 5.0 software that includes an automatic link to Walmart.com. The Webvan Group, Inc. agreement also provided for promotion of Walmart.com in 310 Lakeside Drive the online shopping areas of all AOL properties. Foster City, CA 94404, U.S.A. Tel. 650-627-3000 Fax: 650-627-3099

Unique Visitors (March 2000): 140,000 Reach: 0.2% Rank: 5,287

ORGANIZATION Business Sector: Groceries, Household Products, General Merchandise Founded: December 1996 Employees: 1,000+ (101 IT/web development staff) Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Foster City, CA headquarters • Oakland, CA distribution center • Suwanee, GA distribution center • Springfield, VA distribution center site* • Grapevine, TX distribution center site* • Carol Stream, IL distribution center site* • Kent, WA distribution center site* • Denver, CO distribution center site* • North Bergen, NJ distribution center site* • Logan, NJ distribution center site* • Bronx, NY distribution center site* • Ayer, MA distribution center site* • Foothill Ranch, CA distribution center site* • Glen Burnie, MD distribution center site* * Site leased and distribution center is planned or under construction but is not in operation as of 5/31/00 Telecenter: In-house call center with 250+ customer service representatives Ownership: Public Trading Symbol: WBVN (NASDAQ) Major Shareholders: • Louis Borders, Chairman • SOFTBANK America • Benchmark Capital • Sequoia Capital • CBS Inc. • Knight-Ridder Company Financing: $966.03 million in four rounds and IPO Profitable: No ($144.6 million loss for FY ’99)

WEBSITE OVERVIEW Website: www.webvan.com Site Launch: May 1999 Site Type: Business-to-consumer

166 copyright  2000 by The Intermarket Group The eCommerce Almanac

Webvan Grocery Shopping Home Page Europe. B.S. in Management from the State University of New York at Buffalo and M.B.A. from the State University of New York at Binghamton. Arvind Peter Relan, Senior Vice President, Technology. Previously served in various management positions at Oracle Corp., including vice president of Internet server products, founded Oracle's Internet Server Division, and served in various positions at Hewlett-Packard, including principal technologist for the HP Openview Platform. B.S. in Computer Engineering from the University of California, Los Angeles and M.S. in Engineering Management from Stanford University. Maigread Martinez, Vice President, Marketing and Strategic Alliances. Previously served in various strategic brand alliance, marketing and brand management, and sales positions with the Pepsi-Cola Company, including vice president of northeast sales. Vivek Joshi, Vice President, Program Management. Previously served in various positions at General Electric Company, including general manager, off-highway/transit operations at GE Transportation Systems, as a management consultant at Booz Allen & Hamilton, and a Manufacturing Team Leader at Johnson & Johnson Advanced Materials Company. B.Tech in Chemical Business Model: Fixed pricing Engineering from the Indian Institute of Technology, Site Size: 18,000 (approx.) product SKUs Bombay, and M.S. in Chemical Engineering and M.B.A. Languages: English from the University of Virginia. Accepts Advertising: No Christian Mannella, Vice President, Marketing. Site Features: General help, one-click ordering/quick-buy, Previously served in various positions at MCI WorldCom, online real-time customer service including vice president of sales & service operations, and Back-end Integration: Access to customer account as group product manager at Credit Card Service Corp., information, order history, inventory availability, order marketing manager at Marriott International, and as a processing, and payment processing are integrated into management consultant with Laventhol & Horwath. B.A. website. in Hotel, Restaurant and Institutional Management from Michigan State University. MARKETING Dan Mosher, Manager of Business Development Media: Television advertising, newspaper advertising Partnerships: INTERNET INFRASTRUCTURE • AT&T@Home (www.home.com) Design Consultants: None • SchoolPop.com (www.schoolpop.com) Site Maintenance: In-house staff Affiliates Program: None Hosting Arrangement: Co-located server(s) Access Provider: AboveNet Communications MANAGEMENT Mirror Locations: None Louis Borders, Chairman. Previously served as president Hardware Platform: Sun Microsystems, Intel Pentium and CEO of Webvan, co-founded Synergy Software, Operating System: FreeBSD, Solaris, Microsoft Windows founded Borders Books and served as its president and NT 4 CEO. B.A. in Mathematics from the University of Web Server Software: Apache, Microsoft IIS 4.0 Michigan. Commerce Platform: Proprietary applications George Shaheen, President and Chief Executive Officer. Database Platform: Oracle 8 Previously served as managing partner and chief executive Personalization: Proprietary applications officer of Andersen Consulting. B.A. in marketing and Affiliate Management: Not used master's degree in finance from Bradley University. Payment Processing: Proprietary applications Robert Swan, Chief Financial Officers. Previously served Other Applications: Descartes Systems Group eScheduler, in various positions at General Electric Company, LivePerson Internet sales and customer service solution, including vice president, finance and CFO of GE Lighting, Mercury Interactive LoadRunner and WinRunner and as vice president, finance of GE Medical Systems in

OPERATING BENCHMARKS The company has partnered with numerous key Total Revenue suppliers, including The Pillsbury Company, Kellogg 1999...... $13.31mn Company, The Quaker Oats Company, and General Mills. 1998...... 0 Revenues for the first quarter ending March 31, 2000 1997...... 0 were $16.3 million with a loss of $38.7 million. The company added approximately 40,000 new customers, Marketing Expenditures ending the quarter with more than 87,000 active accounts. 1999...... $11.75mn Repeat customers accounted for 78% of total orders during 1998...... 0 the quarter and the average order was $90.33, up from 1997...... 0 $81.31 in the previous quarter. In July 1999, the company announced an agreement Development Expenditures with Bechtel Corp. worth an estimated $1 billion for the 1999...... $15.24mn construction of up to 26 additional distribution centers 1998...... $ 3.01mn over a three year period. The two companies planned to 1997...... 0 jointly develop specifications for a standardized Webvan distribution center and Bechtel would oversee Total Customers construction of the facilities. Bechtel has also received 1999...... 47,000 warrants to purchase up to 1.8 million shares of Webvan 1998...... 0 common stock; 150,000 shares have already been 1997...... 0 purchased and Bechtel may purchase an additional 150,000 shares when the first six distribution centers are COMMENTS completed plus 57,690 additional shares upon the Webvan is a full-service online retailer that enables completion of each subsequent distribution center. customers to order groceries and general merchandise over the Internet 24 hours a day, 7 days a week, and select a 30- minute delivery window and delivery location that are most convenient. The company currently serves customers in the San Francisco Bay area, Sacramento, CA, and Atlanta, GA; plans are in the works to begin deliveries in Chicago, IL, Seattle, WA, Northern New Jersey, and Baltimore, MD during 2000 and another 18 U.S. metropolitan markets within three years. Webvan was founded, and is headed-up by Louis Borders, founder of the Borders bookstore chain. The core of Webvan’s operations are a nationwide network of highly-automated distribution centers. At a cost of approximately $35 million each, the facilities are built around a proprietary automated materials handling controller that links the company’s online storefront with its warehouse management system and issues instructions in real-time to the various mechanized areas of the distribution center for the fulfillment of orders. Products are picked by robotic devices and transported on automated conveyors and carousels to a central location where the finished orders are inspected for delivery. Each facility is capable of handling up to 8,000 orders per day and as many as 50,000 product SKUs. The company’s product mix includes a variety of fresh produce, prepared meals, and packaged food and household products. During the first quarter of 2000, office supplies, books, pet supplies, postage stamps, and mass transit fare and toll cards were added. In June 2000, the company added magazines, consumer electronics, CDs, videos, and DVDs to its product offerings.

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Wells Fargo & Company Wells Fargo Online Home Page 420 Montgomery Street San Francisco, CA 94163, U.S.A. Tel. 415-396-3053 Fax 415-788-7404

Unique Visitors (March 2000): 1,320,000 Reach: 2.0% Rank: 481

ORGANIZATION Business Sector: Banking/Brokerage/Financial Services Founded: 1852 Employees: 103,000 (850 web staff) Offline Activity Storefronts: 2,851 branch banking locations Catalogs Mailed: None Facilities: • San Francisco, CA headquarters • San Francisco, CA data center • Portland, OR data center • Phoenix, AZ data center • Approximately 5,500 banking, mortgage, consumer finance, insurance, and investment storefronts and secondary offices nationwide Telecenter: In-house call center with 600+ representatives for Internet Services Group Ownership: Public Trading Symbol: WFC (NYSE) Shareholder Equity: $22.13 billion Profitable: Yes ($3.75 billion profit for FY ’99) MANAGEMENT WEBSITE OVERVIEW Clyde Ostler, Group Executive Vice President of Internet Website: www.wellsfargo.com Services Site Launch: January 1995; May 1995 (transaction Cathy Graeber, Executive Vice President, Consumer enabled version) Internet Services Site Type: Business-to-consumer, business-to-business Debra Rossi, Executive Vice President, Business Internet Business Model: Fee-based Services Site Size: Bank, loan and credit card account access, bill Steven Ellis, Executive Vice President, Wholesale Internet payment, securities trading, home equity loan and credit Services card application/approval, 10,000+ content pages Shelley Freeman, Executive Vice President, Investment Languages: English Internet Services Accepts Advertising: No George Cheng, Senior Vice President, Online Banking Site Features: General help, contextual help Services Back-end Integration: Access to customer account Michelle Banaugh, Senior Vice President, Electronic information, transaction history, transaction processing, Commerce and transaction status are integrated into website. INTERNET INFRASTRUCTURE MARKETING Design Consultants: None Media: Television advertising, consumer and business Site Maintenance: In-house staff periodical advertising Hosting Arrangement: On-site server(s) Partnerships: Access Provider: Genuity • America Online (Proprietary dial-up service) Mirror Locations: One Affiliates Program: None Hardware Platform: Sun Microsystems, Compaq

Operating System: Compaq Tru64 UNIX, Solaris up from the bank’s existing customers and the balance are Web Server Software: Netscape Enterprise Server new account holders. The bank expects the number of Commerce Platform: Proprietary applications Internet customers to exceed 2.5 million by 2002. Database Platform: Oracle, real-time link to back-end The company consolidated its various Internet and e- legacy databases commerce initiatives into an Internet Group in July 1999. Personalization: Planned, currently in process The 844-person unit is working on approximately 300 Affiliate Management: Not used projects for 1999. The company expects the unit to more Payment Processing: CheckFree bill payment services, than double to 1,700+ software developers, technicians, proprietary applications and other staff by year-end 1999. Other Applications: Information Builders WebFOCUS, A major facelift of the Wells Fargo website was E.piphany E.4 System, Banter Relationship Manager, Just unveiled in March 2000. The company’s strategy is to in Time BillCast 2.0, Financial Fusion Server and OFX build a financial portal, providing individuals and Adapter businesses access to Wells Fargo and third-party bank accounts, credit cards, loans and brokerage accounts; bill OPERATING BENCHMARKS payment services; online shopping and procurement Total Revenue services; travel services; and information resources. 1999...... $21.80bn Content partners include real estate information publisher 1998...... $20.48bn Homestore.com, automobile buying service DriveOff.com, 1997...... $19.28bn which provides car pricing information and dealer locations, and Netstock Direct, which provides investors Total Advertising Expenditures information about direct stock plans and mutual funds, as 1999...... $238mn well as online enrollment and transaction services. 1998...... $237mn The company has been involved in a wide variety of e- 1997...... $202mn commerce initiatives in addition to its online banking services. It has partnered with Chase Manhattan and First Core Deposits (end of period) Union to launch The Exchange, a banking and financial 1999...... $126.20bn services aggregator. In July 1999, the company purchased 1998...... $132.29bn a $25 million stake in Navidec and its online auto sales 1997...... $122.33bn unit, DriveOff.com. In September 1999, partnered with First Data Corp. to launch the “One-Stop eStore,” an e- Retail Banking Customers (end of period) commerce solution for small- and mid-sized businesses, 1999...... 10,800,000 providing web design, development and hosting services, 1998...... 9,100,000 payment processing, and traffic building. In December 1997...... n/a 1999, partnered with Brodia to launch “Wells Fargo EasyOrder,” an online shopping service that would Online Accounts (end of period) automatically complete online store order forms at more 1999...... 1,500,000 than 1,000 participating retailers. In April 2000, 1998...... 760,000 completed the first of a multi-phase investment in 1997...... 420,000 BusinessBots, Inc, a provider of digital exchanges for net marketplaces. In March 2000, announced the launch of COMMENTS “eStore Business Solutions,” an end-to-end e-commerce Wells Fargo & Company is the seventh largest bank solution for mid-size businesses that provides Internet holding company in the U.S. in terms of total assets. The catalog and marketing support services. The company also company has bank branches in more than 20 states and announced an alliance with online auctioneer eBay in operates the second-largest online banking service. March to create an industry standard for person-to-person The company’s online banking service was originally payment on the Internet based on the technology of eBay launched on the Prodigy proprietary online service in subsidiary Billpoint. As part of the deal with eBay, Wells 1989; the Internet counterpart was launched in 1995. In Fargo purchased a 35% stake in Billpoint and inked a 1998 the company abandoned its service on Prodigy to long-term payment processing and customer care contract. focus its online activities exclusively on the Internet. At In May 2000, the company led a $23 million second round the end of March 2000, the online banking service had of venture capital in iPin, who’s services enable online more than 1.7 million registered users and more than shoppers to pay for purchases by debiting their bank 450,000 customers using its online bill payment service. account or charging their ISP, telephone, mobile phone, or The number of online banking customers has been credit card account. increasing by more than 100,000 per month since August 1999. Approximately 80% of online customers are signed-

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Wine.com Wine.com Home Page 650 Airpark Road, Suite D Napa, CA 94558, U.S.A. Tel. 707-265-2860 Fax 707-265-9165

Unique Visitors (March 2000): 179,000 Reach: 0.3% Rank: 4,197

ORGANIZATION Business Sector: Wine/Beverages and Gifts Founded: August 1994 Employees: n/a Offline Activity Storefronts: None Catalogs Mailed: None Facilities: • Napa, CA headquarters • Fremont, CA engineering offices Telecenter: In-house call center with 30 representatives; currently staffing-up to 100 Ownership: Private Trading Symbol: None Major Shareholders: MARKETING • TH Lee.Putnam Internet Partners • Media: Radio and television advertising, consumer New Millennium Partners periodical advertising • GE Equity Partnerships: • Value Vision • Amazon.com (www.amazon.com) • MediaOne Ventures • America Online (Proprietary dial-up service) • J. & W. Seligman • America Online (www.aol.com) • Inroads Capital • America Online (www.netscape.com) • Applied Technology • America Online (www.compuserve.com) Financing: $88 million in four rounds • della.com (www.della.com) Profitable: No • Excite@Home (www.excite.com) • CyberGold Inc. (www.cybergold.com) WEBSITE OVERVIEW • Website: www.wine.com, www.virtualvin.com GiftCertificates.com (www.giftcertificates.com) • Site Launch: January 1995 giftpoint.com (www.giftpoint.com) • Site Version: 4.0 Lycos Inc. (www.lycos.com) Site Type: Business-to-consumer • MarketWatch.com Inc. (www.marketwatch.com) Business Model: Fixed pricing • Microsoft Corp. (www.msn.com) Site Size: 1,500+ wines and 100+ gift and accessory • OfficeClick.com Inc. (www.officeclick.com) SKUs • PeoplePC, Inc. (www.peoplepc.com) Languages: English • Public Broadcasting Service (Regina's Vegetarian Accepts Advertising: No Table, Great Food, and Master Chef USA programs) Site Features: General help, contextual help, one click • ShopperConnection (www.shopperconnection.com) ordering/quick buy • Third Age Media (www.thirdage.com) Back-end Integration: Access to customer account • WingspanBank (www.wingspan.com) information, order history, inventory availability, order • Yahoo! Inc. (www.yahoo.com) processing, payment processing, order status, and shipment Affiliates Program: Wine.com Affiliate Program tracking are integrated into website. Number of Affiliates: n/a Commission Rate: 8% of order value

MANAGEMENT INTERNET INFRASTRUCTURE Kenneth Orton, Chairman of the Board. Previously Design Consultants: None served as president and CEO of Preview Travel. B.A. in Site Maintenance: In-house staff Marketing from California State University at Fullerton. Hosting Arrangement: Co-located server(s) William Newlands, President and Chief Executive Access Provider: Global Crossing GlobalCenter, Akamai Officer. Previously served as president and CEO of Technologies Domaine Chandon and Simi Winery for Moet Hennessy Mirror Locations: None Chandon Estates, management consultant for A&A Foods Hardware Platform: Sun Microsystems and Canandaigua Wine Company, and as vice president, Operating System: Solaris marketing for E&J Gallo Winery. B.S. from the Web Server Software: Apache, Netscape Enterprise University of Pennsylvania and M.B.A. from Harvard Server Business School Commerce Platform: Proprietary Java and Perl Douglas T. Koo, Chief Financial Officer. Previously applications served as CFO of Blue Chalk Café Corp., as a principal Web Servers: Multiple Sun Ultra 5 and Ultra 10 servers with Gemini Consulting, and as an associate with KPMG Database Platform: Oracle Peat Marwick. B.A. from the University of California, San Database Servers: Sun Enterprise 3000 server Diego and M.B.A. from Stanford University. Personalization: Net Perceptions GroupLens Peter Granoff, Founder, Senior Vice President and Chief Recommendation Engine, Net Perceptions for E- Merchant. Previously served as the sommelier and wine Commerce director for Square One restaurant and as food and Affiliate Management: LinkShare beverage director for the Stanford Court Hotel. Payment Processing: Signio Payflow Pro Rob Jennings, Senior Vice President of Content and Other Applications: Netscape Application Server, Programming. Previously served in various positions at Radware WSD-Pro load balancing software, Personify AOL Interactive Services, including vice president of Essentials, Agog Software's e- Business Scorecard, Digital programming and development, and as vice president, new Impact e-mail marketing, CyberCash InstaBuy media research & development for Warner Bros. M.F.A. from the University of California, Los Angeles' School of COMMENTS Film and Television. Wine.com was founded in 1994 as Virtual Vineyards Kennedy Brooks, Senior Vice President, Business and assumed its current name in September 1999 after Development. Previously served as executive vice acquiring competing online wine retailer, Wine.com. president of Global Planning and Development for Since the acquisition of Wine.com, the company has NETEQ and as vice president and general counsel for positioned itself as a “wine portal,” offering a mix of USWeb. B.S.F.S. from Georgetown University's School wines, related gifts and accessories, reviews, and reference of Foreign Service and J.D. from the University of material. In September 1999, the company also launched a Maryland School of Law. new service, The Winery [email protected], that enables Chris Fehrnstrom, Senior Vice President, Marketing. wineries to create co-branded pages on the Wine.com site Previously served as vice president of marketing for and leverage its e-commerce, distribution, and customer Domaine Chandon, general manager of the grapefruit service infrastructure. Wine.com is private and does not division of Ocean Spray, and as a marketing executive at release financial results but the company reports that sales Gallo winery. B.A. from the University of New have increased by approximately 100% per year since it Hampshire and M.B.A. from the University of North was founded. Carolina's Kenan-Flagler Business School. Because the company sells alcoholic beverages, it must Tim Moran, Senior Vice President, Technology and comply with a variety of regulations that vary from state to Operations. Previously served as CFO and head of IT at state and from country to country. Since mid-1998, the TravelSmith and in various positions at Hanover Direct. company has assembled a three-tier network of B.A. in Finance from Rutgers University. wholesalers and retailers which enables it to ship wine Cyrus Khoshnevisan, Vice President of Engineering. legally to the majority of U.S. markets and to certain Previously served as lead software engineer for Integral markets in Europe, Asia, and South America. The Development Corp., as a senior product manager at company currently delivers to about 20 states where direct ParcPlace Systems, and in a variety of engineering roles at shipping is permissible and uses wholesale and retail Amdahl Corp. B.S. in Computer Science from Columbia partners in approximately 20 other states. The Wine.com University, B.A. in Engineering Sciences from Franklin & website and back-end order processing systems are Marshall and M.B.A. from Santa Clara University. designed to properly route orders for fulfillment based on delivery address and ensure that appropriate taxes are paid. A secure extranet is used to link the company with its distribution facilities and fulfillment partners.

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Notes

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Section 2

Analysis of Profiled Companies

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1.0 Profiled Companies at a Glance

A majority (60%) of companies profiled by The eCommerce Almanac are so- called “pure-play Internet firms,” companies that use the Internet as their principal -- or exclusive -- sales channel. The balance are “clicks-and-mortar firms” which pre- date today’s mainstream Internet and use the online channel to supplement their existing sales force or bricks-and-mortar distribution infrastructure.

1.01 Types of Companies Percent of all profiled companies

Clicks-and- mortar Firms 39.9%

Pure-play Internet Firms 60.1%

More than 400 Internet-related companies -- including e-commerce, content, services, and infrastructure companies -- have sold shares to the public during the last three years so it shouldn’t be surprising that substantially more than one-half of the companies profiled are publicly-held. Among the profiled pure-play Internet companies, almost two-thirds are publicly-held and another one-in-seven have recently filed registration statements in preparation for an initial public offering of their shares.

1.02 Ownership of All Profiled Companies Percent of all profiled companies

Privately-held 24.7%

Publicly-held 66.7%

IPO Pending 8.6%

1.03 Ownership of Pure-Play Internet Companies Percent of all profiled pure-play companies

Privately-held 22.4%

Publicly-held 63.3%

IPO Pending 14.3%

Softbank Holdings has been an aggressive investor in the Internet space during the last four years and leads the list of venture capitalists behind the profiled companies, followed closely by Benchmark Capital. The leading corporate and strategic investors included Amazon.com (NASDAQ: AMZN), Intel (NASDAQ: INTC), MediaOne Interactive (NYSE: UMG), and Tribune Company (NYSE: TRB). Other corporate investors included units of CitiGroup (NYSE: C), Oracle Corp. (NASDAQ: ORCL), and Bechtel. Prominent individuals, such as Michael Dell (MSD Capital) and hedge fund operator George Soros also showed-up as major investors in more than one company each.

1.04 Most Active Investors

# of profiled companies in Investor portfolio Softbank Holdings (and affiliates) 10 Benchmark Capital 7 Sequoia Capital 5 Kleiner Perkins Caufield & Beyers 4 Hummer Winblad Venture Partners 4 GE Capital (and affiliates) 3 Intel Corp. 3 MediaOne Interactive 3 Amazon.com 3 General Atlantic Partners 3 idealab! 3 Vulcan Ventures 3 Tribune Company 3 Accel Partners 3 Trinity Ventures 3

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2.0 Measuring the Size of Profiled Companies

Revenue from online sales and Internet-related activity among the profiled companies is growing at a rapid pace, expanding by an average of 486% during 1999 and a median rate of 224% over the same period. Median annualized revenues for the first quarter of 2000 and for all of 1999 were $124.72 million and $51.25 million respectively. Almost one-in-ten (8.5%) of the profiled companies will generate more than $1 billion in online revenue during the 2000 fiscal year; the largest, Dell Computer, should generate more than $10 billion in online sales during 2000 based on current run rates. ActivMedia reports that revenues among the sites tracked in its ‘Real Numbers Behind Net Profits’ increased by an average 464% from 1998 to 1999. The average projected growth rate for 2000, among the same companies, is 656% and 40% expect their top line revenues to more than double over 1999.

2.01 Online Revenue (1999) Percent of profiled companies

$500mn - $250mn - $999mn > $1bn $499mn 5.6% 5.6% 7.4% < $1mn $100mn - 1.9% $249mn 14.8% $1mn - $9mn 13.0%

$10mn - $24mn $25mn - $99mn 18.5% 33.3%

2.02 Online Revenue Growth (1999 vs. 1998) Percent of profiled companies

>2000% < 50% 6.7% 8.9% 1000% - 1999% 8.9% 50% - 99% 13.3% 500% - 999% 6.7%

400% - 499% 13.3% 100% - 199% 22.2% 300% - 399% 4.4% 200% - 299% 15.6%

2.03 Annualized Online Revenue (Q1 2000) Percent of profiled companies

> $1bn 14.3% $10mn - $24mn 9.5% $500mn - $999mn 9.5%

$250mn - $499mn $25mn - $99mn 11.9% 33.3%

$100mn - $249mn 21.4%

The average head count of Internet-related operations in the profiled companies is 962 persons and the median head count is 253. The head count data is based on total staffing levels at the pure-play Internet companies and at the stand-alone Internet units of clicks-and-mortar companies only.

2.04 Internet Employees per Company Percent of profiled companies

500 - 999 Employees 11.9% 250 - 499 > 1,000 Employees Employees 22.0% 16.9%

< 50 Employees 1.7%

50 - 99 Employees 100 - 249 15.3% Employees 32.2%

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2.05 Customers and Registered Users per Profiled Website (1999) Percent of profiled websites > 5mn 8% < 10,000 1mn - 5mn 5% 32% 10,000 - 99,999 14%

500,000 - 100,000 - 999,999 499,999 14% 27%

The largest proportion of profiled companies’ websites had between one and five million customers/users at the end of 1999. A majority (55%) had at least 500,000, compared to 39% one year earlier. Total customers and registered users among the sites increased by an average 117% during 1999. At the end of 1999, the average profiled company’s site had approximately 2.1 million customers or registered users compared with 969,529 one year earlier.

2.06 Customers and Registered Users per Profiled Website (1998 vs. 1999) Percent of profiled websites

1998 1999 40%

32%

30% 27% 25% 22% 19% 20% 14% 14% 14% 15%

Percent of websites 10% 5% 6%

0% < 10,000 10,000 - 100,000 - 500,000 - 1mn - 5mn > 5mn 99,999 499,999 999,999

Number of customers/users

2.07 Growth in Customers and Registered Users (1998 vs. 1999) Percent of profiled websites

> 1,000% < 50% 12.1% 9.1%

500% - 999% 9.1% 50% - 99% 24.2%

200% - 499% 30.3% 100% - 199% 15.2%

3.0 Offline Presence of Profiled Companies

Approximately one-in-five (21.3%) of the profiled companies publish hardcopy catalogs in addition to operating an online storefront. More than two-thirds (68.8%) of those companies distributed 10+ million catalogs during 1999. The largest circulation catalogs in 1999 were published by Office Depot (296 million), Lands’ End (236 million) and L.L. Bean (150 million).

3.01 Hardcopy Catalog Circulation Percent of all profiled companies which publish catalogs

< 1mn 12.5%

> 50mn 37.5% 1mn - 9mn 18.8%

10mn - 49mn 31.3%

Approximately one-third (35.8%) of the profiled companies also operate one or more “bricks-and-mortar” storefronts. The largest proportion of companies (11%) had more than 1,000 storefronts, followed by companies with between 100 and 500 storefronts (10%). The average number of storefronts among them was 1,005 at the end of March 2000.

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3.02 Storefront Locations of Profiled Companies Percent of profiled companies

100%

80% 64.2% 60%

40%

20% 11.1% 9.9% 6.2% 4.9% 3.7% 0% None 1 - 9 10 - 99 100 - 499 500 - 999 > 1,000

4.0 Profiled Websites at a Glance

4.01 Audience of Websites Percent of profiled websites

Mixed Audience 28%

Business-to- consumer 56%

Business-to- business 16%

A majority (56%) of the profiled companies’ websites target retail consumers exclusively while approximately one-in-six (16%) focus on business customers. Approximately one-in-four (28%) of the websites target a mixed audience of both individuals and businesses. A majority (51.9%) of the websites were launched between three and five years ago. Among all of the sites, those of the pure-play Internet companies were generally newer than their clicks-and-mortar counterparts. More than one-third (34.7%) of the pure-play company sites were less than 24 months old, compared with only 6.2% among the clicks-and-mortar companies. Conversely, almost twice as many clicks-and-mortar companies (81.2%) as pure-play companies (46.9%) had commerce sites that were three or more years old.

4.02 Age of Profiled Websites Percent of profiled companies within each category

All Firm s Pure-play Internet Firms Clicks-and-mortar Firms

60%

50% 40.6% 40% 34.3% 28.6% 30% 28.4% 23.5% 20.4% 18.4% 20% 18.5% 16.3% 16.0% 12.5% 10.2%

10% 8.6% 6.3% 6.1% 4.9% 3.1% 3.1% 0% < 12 Mos. 12 - 24 Mos. 25 - 36 Mos. 37 - 48 Mos. 49 - 60 Mos. > 60 Mos.

The average number of product SKUs (stock keeping units) cataloged -- or services offered -- on the profiled companies’ websites is slightly more than 539,000; the median number is 16,000. When the mega-sites -- those with more than one million catalogued items, such as Amazon.com (18+ million) and eBay (14+ million) -- are excluded, the average drops to approximately 64,000. The most common site size was between 10,000 and 50,000 items.

4.03 Size of Profiled Websites Percent of profiled websites

10,001 - 50,000 50,001 - items 29.5% 250,000 items 17.9%

250,001 - 1mn items 5.1%

> 1mn items 1,000 - 10,000 3.8% items 28.2% < 1,000 items 15.4%

All of the profiled companies’ websites provide general customer service and help pages; almost one-half (47%) also offer at least a limited “contextual help” feature which answers questions related to content or functions provided on specific pages or areas located inside the site. Other popular features include one-click ordering or a quick-buy function (38%) that enables returning customers to by-pass re-keying their shipping and payment details, real-time customer service (32%) -- either through an online chat window or through a call-back button that prompts a

184 copyright  2000 by The Intermarket Group The eCommerce Almanac

customer service agent to contact the customer at that moment by telephone -- and customer-created content (29%), such as reviews, comments, and even free personal websites. For context, an October 1999 survey of e-commerce websites by Jupiter Communications found that 90% had a customer service FAQ (Frequently Asked Questions) but only 10% had deployed real-time chat/messaging for customer service. A substantial majority of the sites have implemented at least some type of integration to back-end systems. The most common feature enabled by such integration is providing web access to customer account information; this access is also the key to offering a one-click or quick-buy feature. Other popular forms of back-end integration include providing customers access to the status of open orders (71%), access to order history (58%), and indications of product availability in online catalogs based on current inventory (57%).

4.04 Features in Profiled Websites Percent of profiled websites

100% 100%

80%

60% 47%

38% 40% 32% 29%

Percent of websites 24% 22% 21% 20% 15%

3% 4% 0% Vers ion Foreign Content Foreign Service Text-Only Ordering Language Language Customer Real-Time Threaded Discussions IP Telephony IP Customer General Help General Quick Ordering Quick Customer Chat Contextual Help Contextual Created Content Created

4.05 Website Back-end Integration Percent of profiled websites

100% 88.3% 79.2% 80% 71.4%

58.4% 60% 57.1% 50.6%

40.3% 40% Percent of websites

20%

0% Account Order History Inventory Order Payment Order Status Shipment Information Availability Processing Processing Tracking copyright  2000 by The Intermarket Group 185 The eCommerce Almanac

Almost one-in-four (23.4%) of the profiled companies’ websites include advertising on their home pages and or on their inside pages. Some of the companies, such as BUY.COM, have built their business models around the assumption that products/services can be sold at cost and advertising revenue will ultimately provide a substantial share of any earnings. Other companies, such as CDnow, view their advertising revenue as a high-margin source of incremental income.

4.06 Advertising on Profiled Websites Percent of profiled websites

Accepts Advertising 23.4%

No Advertising on Site 76.6%

A majority (54%) of the profiled companies’ websites receive more than one million unique visitors per month, according to data from PC Data. The average number of unique visitors per site during the first three months of 2000 was 1.87 million and the median was 1.1 million. The largest proportion of sites (33.8%) received between one and two million unique visitors during March 2000. The number of unique visitors to the sites expanded by an average of 213% and a median of 100% from March 1999 to March 2000, according to PC Data. Almost one-half (49.9%) of the sites experienced an increase in visitors of 100% or more during the period while traffic at 16% of the sites actually declined by an average 24.6%.

4.07 Unique Visitors to Profiled Websites (March 2000) Percent of profiled websites

> 5mn per Month < 250,000 per (6.5%) 3mn - 5mn per Month (11.7%) Month (7.8%)

2mn - 3mn per Month (6.5%) 250K - 499K per Month (14.3%)

1mn - 2mn per 500K - 999K per Month (33.8%) Month (19.4%)

186 copyright  2000 by The Intermarket Group The eCommerce Almanac

4.08 Growth in Unique Visitors to Profiled Websites (March 1999 vs. March 2000) Percent of profiled websites

> 500% Visitor < 0% Visitor Growth (10.7%) Growth (16.2%) 250% - 500% Visitor Growth (10.7%) 0% - 49% Visitor Growth (12.5%) 150% - 249% Visitor Growth (8.9%)

50% - 99% 100% - 149% Visitor Growth Visitor Growth (21.4%) (19.6%)

5.0 Technologies Deployed By Profiled Websites

A majority (54%) of the profiled companies’ websites are maintained on co- located servers. Approximately 15% of the sites employ managed hosting, at least to some extent. More than one-in-eight (13%) also use distributed content hosting services such as Akamai and Digital Island to serve graphics and various types of content to their visitors. As sites scale-up and the costs associated with downtime increase, a growing number of e-commerce sites are building in some degree of redundancy by sourcing bandwidth upgrades from a second (32%) or even three or more (15%) connectivity providers. The development of mirror locations -- and other types of redundant back-ups -- are also becoming increasingly common for the same reason (see 5.04). More than one-in-four (28%) of the profiled companies have either already brought online one or more mirror sites, or they have plans to do so within the next 12 months.

5.01 Hosting Practices of Profiled Websites Percent of profiled websites

Combination of On-site Servers Hosting Options 29% 9%

Managed Hosting 8%

Co-located Servers 54%

5.02 Number of Hosts and Connectivity Providers Used by Profiled Websites Percent of profiled websites

Two Providers Three Providers 32% 9%

Four or More Providers 6%

One Provider 53%

Co-location provider Exodus Communications is the most popular solution provider among the profiled companies, serving almost one-in-three (32%) websites. UUNET and Global Crossing’s GlobalCenter subsidiary are the second and third most frequently used connectivity solution providers. Other connectivity providers and hosting firms mentioned by the profiled companies, in addition to those listed below, are Qwest, Level3 Communications, Verio, SAVVIS, and AboveNet.

5.03 Connectivity Solution Providers Used by Profiled Websites

Share of Profiled Connectivity Solution Provider Websites Exodus Communications 32% UUNET/MCI Worldcom 20% Akamai Technologies 11% Global Crossing/GlobalCenter 11% Genuity 10% InterNAP Network Services 9% Sprint Internet Services 9% AT&T 8% IBM Corp. 4% Digex 4% Cable & Wireless 4%

5.04 Use of Mirror Locations by Profiled Websites Percent of profiled websites Yes 24%

Planned 4%

No 72%

188 copyright  2000 by The Intermarket Group The eCommerce Almanac

5.05 Hardware Platforms of Profiled Websites Percent of profiled websites

60%

50% 44.2%

40%

30% 24.7% 20.8% 20% Percentwebsites of

9.1% 9.1% 10% 5.2% 5.2% 2.6%

0% Sun Dell Computer IBM Compaq Hew lett VA Linux Generic Other Mic r os y s tems Pac kar d Pent ium

5.06 Operating Systems Deployed by Profiled Websites Percent of profiled websites

80%

59.7% 60%

45.5%

40% Percent of websites of Percent 20% 11.7%

6.5% 5.2% 5.2%

0% Windows NT Windows 2000 Solaris Linux IBM-AIX Other

Most of the profiled companies have deployed servers from a combination of manufacturers and servers based on more than one type of processor. Not surprisingly, Intel Pentium-based servers are used by more of the profiled sites than any other single processor platform. No single hardware manufacturer, however, accounted for a substantial share of the Pentium servers deployed. Servers from Dell Computer were deployed by 9% of the sites and Compaq’s ProLiant servers -- as well as its non-Pentium-based AlphaServers -- were deployed by 21%. Sun Microsystems’ servers were the most widely deployed of any single manufacturer,

with 44% of sites including them in their server farms. Among the sites which standardized on a single manufacturer’s servers, Sun was the most frequently selected platform. As is the case with server hardware, many of the profiled websites deployed more than one operating system. Microsoft’s Windows NT was the most widely deployed, showing up in almost 60% of the sites; Microsoft’s new Windows 2000 also showed up in almost 7% of sites. Sun’s Solaris is the second most widely deployed OS (46%) and the most popular flavor of UNIX among the sites. Although Linux has received a great deal of attention during the last 12 months, only 5% of the sites have deployed any servers in their Internet infrastructure which use the OS. Other operating systems deployed by the sites include HP-UX, Compaq Tru64, and JOSP.

5.07 Web Server Software Deployed by Profiled Websites Percent of profiled websites

Microsoft IIS Other 47% 3%

Apache 22%

Netscape Enterprise 28%

5.08 Commerce Platforms Deployed by Profiled Websites

Share of Commerce Platform Profiled Sites Proprietary applications 52% Microsoft Site Server Commerce Edition 25% Broadvision 7% IBM Net.Commerce 5% ART Technology Group Dynamo Server 4% Interworld Commerce Exchange 4% Bluestone Total-e-Business 3% Other solutions 10%

With almost 60% of the profiled companies’ websites running Windows NT, it should be no surprise that Microsoft’s Internet Information Server (IIS) is the most widely deployed web server software, running on almost one-half (47%) of the sites. Netscape (iPlanet) Enterprise Server and Apache are the next most popular web server software. A slim majority of the profiled sites (52%) have opted to develop their own home-grown commerce platforms -- online storefront, catalog, customer data management, and order processing applications -- over deploying off-the-shelf

190 copyright  2000 by The Intermarket Group The eCommerce Almanac

solutions. The most widely deployed off-the-shelf commerce platforms are Microsoft’s Site Server Commerce Edition (25%) and BroadVision’s commerce solutions (7%). Other commerce platforms deployed by profiled companies include Smith-Gardner WebOrder, Evergreen Ecential, Netscape Commerce and Application Server, NetResults ProShop, and vertical industry platforms such as Edify’s Electronic Banking System. Almost two-thirds (65%) of profiled companies have employed one or more advanced personalization technologies, such as collaborative filtering, in their sites. Among these firms, 43% have opted to deploy home-grown solutions despite the growing number of off-the-shelf products. Net Perceptions Group Lens is the most widely deployed off-the-shelf application. Other personalization technologies deployed by profiled companies include features embedded in commerce platforms such as ART Technology Group’s Dynamo Application Server (6%), Lotus Webshpere (4%), Bluestone Total-e-Business (2%), Smith-Gardner WebOrder (2%), and vertical industry platforms such as Edify’s Electronic Banking System.

5.09 Profiled Websites Employing Personalization Percent of profiled websites

Sites with no Personalization Features 27% Sites Employing Personalization Technologies 65%

Sites Planning Personalization 8%

5.10 Personalization Solutions Deployed by Profiled Websites

Share of Solution Sites With Personalization Proprietary applications 43% Net Perceptions GroupLens Recommendation Engine 29% Microsoft Site Server Personalization 20% Personify Essentials 12% BroadVision One-to-One 10% Vignette Content Management & Personalization 8% Other solutions 32%

5.11 Database Platforms Deployed by Profiled Websites Percent of profiled websites

60%

51% 50% 44%

40%

30%

20% Percent of websites

10% 7% 4% 4% 3%

0% Oracle Microsoft SQL Informix IBM Proprietary Other Server

Home-grown payment processing solutions are used by more of the profiled companies’ websites than all of the off-the-shelf solutions combined. The most popular off-the-shelf solution among the sites is Cybersource’s ASP-based service, followed by the software solutions of Signio and Cybercash. Other off-the-shelf applications include the payment processing functionality embedded in the IBM and Smith-Gardner commerce platform software. Many of the profiled clicks-and-mortar companies, such as Office Depot and WalMart, have opted to process online payments using the same back-end POS systems which support their existing offline operations. Several of the profiled business-to-business sites (15.1%), such as Grainger.com and AMP, do not accept online payments, but instead require customers to place orders with pre-approved account numbers and a purchase order number.

5.12 Payment Processing Applications Deployed by Profiled Websites Percent of profiled websites

Cybercash Not Used 7.6% 15.1% Cybersource 13.6% Other Applications 12.2%

Signio 7.6% Proprietary Application 43.9%

192 copyright  2000 by The Intermarket Group The eCommerce Almanac

5.13 Affiliate Management Technology Deployed by Profiled Websites Percent of profiled websites

Other 10% Proprietary Applications 27%

Be Free 34%

LinkShare 29%

Almost two-thirds of profiled companies (64%) have established affiliate marketing programs, paying commissions to complementary websites in return for referring registered users or paying customers. The most popular affiliate management and tracking solutions among the profiled companies are the ASP- based services of Be Free (BFAST) and LinkShare. Other outsourced affiliate management solutions include Dynamic Trade and Commission Junction. Only 27% of profiled companies relied on home-grown solutions for affiliate management, down from 72% two years ago (eCommerce Almanac 1.0).

6.0 Driving Traffic to Profiled Websites

America Online, with its 20+ million members worldwide, is the most popular portal marketing partner among the profiled companies. Approximately one-half of the companies have inked either advertising agreements or operate online storefronts on AOL’s proprietary online service. AOL’s other portal sites are almost as popular, with AOL.com, Netscape.com, and Compuserve occupying the next three positions after the

6.01 Partnerships With Web Portals

Deals With Profiled Portal Sites Companies America Online Service 42 America Online/AOL.com 37 America Online/Netscape.com 36 America Online/Compuserve 33 Yahoo! 30 Microsoft Network 26 Excite@Home/Excite.com 21 Lycos 16 Earthlink 12 Buena Vista Internet/Go Network 11 Excite@Home/@Home Network 7

company’s proprietary service. Outside of the AOL properties, Yahoo!, Microsoft Network (MSN), and Excite@Home’s Excite.com site were the next three most popular online marketing partners. Companies offering incentive and convenience services to online shoppers account for more marketing partnerships among the profiled companies than high- traffic destinations, such as USA Today Online and iVillage. The most popular partners in the former category were Netcentives and its Click Rewards program, the Inktomi Shopping Engine service, and online gift certificate services GiftCertificates.com and Giftpoint.com. Amazon.com, which is busily building itself into an online shopping “portal,” is also a popular marketing partner, having inked deals with 11 profiled companies.

6.02 Partnerships With Leading Web Destinations and Services

Deals With Profiled Web Destinations and Services Companies Netcentives/Click Rewards 13 Inktomi Shopping Engine 12 Amazon.com 11 GiftCertificates.com 11 America Online/Digital City 10 Wingspan Bank.com 9 ShopperConnection 8 USA Today Online 8 Intuit/Quicken.com 7 Giftpoint.com 7 iVillage 7

6.03 Offline Media Employed by Profiled Websites Percent of profiled companies

100%

80% 74.7% 68.0%

60% 52.0% 53.3% 52.0%

40.0% 40%

20%

4.0% 0% Radio Television Newspaper Consumer Business Direct Mail No Offline Periodical Periodical Media

As Internet use and online shopping have become mainstream activities, e- commerce companies have aggressively employed mass media advertising to build their respective brands and to drive traffic to their websites. Three-quarters (74.7%)

194 copyright  2000 by The Intermarket Group The eCommerce Almanac

of the profiled companies have used television advertising during the last 12 months and 68% have advertised on radio. More than one-half have also used national or local newspapers, consumer periodicals, and direct mail in their marketing and branding campaigns. Almost two-thirds of profiled companies (64%) have established an affiliates program, paying commissions to complementary websites in return for referring registered users or paying customers. The concept is most popular among companies whose websites focus exclusively on serving retail consumers. They are almost as popular among sites serving a mixed audience of businesses and retail consumers. None of the profiled companies’ sites which focus exclusively on business customers have implemented an affiliates program. The average affiliates program among the profiled companies has almost 72,000 members; 9% have less than 500 members, 27% have less than 5,000 members, and

6.04 Size of Profiled Companies’ Affiliate Programs Percent of profiled companies with affiliate programs

50,000 - > 100,000 100,000 Mem bers Mem bers 9% 6% < 500 Members 9%

25,000 - 49,999 Mem bers 500 - 4,999 18% Mem bers 18%

10,000 - 24,999 Mem bers 5,000 - 9,999 25% Mem bers 15%

6.05 Affiliate Program Commission Rates Percent of profiled companies with affiliate programs

Hybrid Commission Model 10.9% < 5% Per-lead Commission Commission 13.0% 21.7%

> 12% Commission 8.7% 5% - 8% Commission 9% - 12% 39.1% Commission 6.5% copyright  2000 by The Intermarket Group 195 The eCommerce Almanac

9% have more than 100,000 members. Amazon.com, which pioneered the concept for the online marketspace, operates the largest network of referring sites with more than 430,000. Amazon.com competitor BarnesandNoble.com operates the second largest program with 360,000 members, followed by online music retailer CDnow with 260,000, and Reel.com with more than 200,000. Almost one-third (32.6%) of the affiliates programs employ a per-lead/order commission or a hybrid model that combines a per-lead/order payment with the traditional percentage commission. The balance of programs offer commissions that range from 1% to 20% of sales, with a mean of 7.49%. The average per-lead/order commission is $12.38 and the median is $5.50. The highest per-lead/order commission is $50.00, which is paid by financial services aggregator OneCore.com for each converted lead.

7.0 Customer Support Infrastructure

As the Internet matures into a mainstream sales channel, companies are working aggressively to expand their back-end customer support infrastructure to keep up with demands created by increasingly comprehensive websites and the rapidly expanding number of online prospects and customers. Clicks-and-mortar

7.01 Call Centers at Profiled Companies Percent of profiled companies

In-house 75.3%

Outsourced 8.2% In-house and Outsourced 5.5% None 11.0%

7.02 Call Center CRM Representatives Percent of profiled companies with call centers

60%

50%

40% 35.9%

30% 23.4%

20% 17.2% 9.4%

10% 7.8% 6.3%

0% < 25 25 - 99 100 - 249 250 - 499 > 500 Not specified

196 copyright  2000 by The Intermarket Group The eCommerce Almanac

companies are typically leveraging their existing telemarketing and telephone support operations while the newer, pure-play Internet firms scramble to build these operations from scratch. Approximately 90% of profiled companies either operate their own in-house call center or they have outsourced the function. The largest proportion of companies with call centers employed more than 500 customer relationship management representatives, followed by the 23% of call centers which employed between 25 and 100 representatives.

8.0 Financial Performance of Profiled Companies

Predictably enough, a substantial majority (71%) of the profiled companies employ a fixed-price business model on their websites. Only 5% employ an online auction or other negotiated pricing model exclusively, however, an increasing number are adding auction areas to their fixed-price sites. Companies such as Ingram Micro and Egghead.com use their online auction areas to move surplus merchandise, Dell Computer uses auctions to move returned and reconditioned hardware, and Sharper Image uses its auction area in part for price discovery for new products.

8.01 Business Models of Profiled Websites Percent of profiled websites

Auction/ Negotiated Price Model 5% Combination Fixed/Negotiated Price Model 10%

Commission/Fe e-based Model Fixed Price 14% Model 71%

Online revenue per employee averaged $405,489 during 1999 and the median revenue per employee was $147,771 during the same period. Computer software and hardware retailers generally reported the highest revenue per employee. Online auctioneer eBay and “name your own price” Priceline.com reported more than $1 million in revenue per employee during 1999. The online drugstores -- PlanetRx and drugstore.com -- and the online grocers -- HomeGrocer.com, Peapod, and Webvan Group -- were in the bottom quartile in terms of revenue per employee. Actual revenue numbers – rather than gross sales or bookings – were used to calculate employee productivity for the online travel sites, auto sites, and auction sites.

The average revenue per unique visitor among the profiled companies ranged from a high of more than $100 -- on several of the business-to-business sites -- to a low of $0.28 during the first quarter of 2000; the mean value was $17.43. The office products, computer hardware and software, and home products sites -- the online grocery shopping sites, specifically -- generally realized the highest top-line revenue per visitor while the toys and sports, and books/CDs/videos/DVDs sites produced the least revenue per visitor. The revenue per visitor estimates are calculated by dividing the number of unique visitors, according to PC Data, into each company’s top line revenue. It’s important to emphasize that these estimates are based on the number of unique visitors to each company’s site(s) during the first quarter of 2000 as opposed to the total visitor traffic of the site(s). Inasmuch as most sites -- especially in the business-to-business sectors -- receive multiple visits from many individuals, revenue per visitor based on

8.02 Revenue per Employee (1999) Percent of profiled companies

< $100,000 per employee 45.2% > $2mn per employee 4.8% $1mn - $2mn per employee 2.4%

$500K - $999K $100K - $249K per employee per employee 14.3% 23.8% $250K - $499K per employee 9.5%

8.03 Revenue Per Visitor (Q1 2000) Percent of profiled websites

> $50.00 per Visitor 12.8% > $2.00 per $40.00 - $49.99 Visitor 15.4% per Visitor 5.1%

$30.00 - $39.99 per Visitor 7.7%

$20.00 - $29.99 $2.00 - $4.99 per per Visitor 10.3% Visitor 23.1%

$10.00 - $19.99 per Visitor 12.8% $5.00 - $9.99 per Vis itor 12.8%

198 copyright  2000 by The Intermarket Group The eCommerce Almanac

8.04 Revenue Per Visitor by Sector (Q1 2000) Dollars per unique visitor among profiled sites in each sector

$50

$40

$30 $24.83 $25.53 $22.48 $19.82 $20 $13.89 $12.04 $9.88 $8.81 Gross Revenue per Visitor $10 $6.79 $6.68

$0 Apparel Autos Books, Computers Financial Gifts Home Off ice Toys & Travel Videos & Products Products Sports Services CDs

total traffic would be some fraction of the value based on unique visitors. Indeed, buyers -- as opposed to browsers -- frequently visit a site more than once, and spend more time on the site, according to PC Data, which estimates that buyers view approximately three times as many pages as browsers before completing a purchase. Average revenue per pageview among the profiled companies ranged from a high of $2.76 to a low of $0.01 during the first quarter of 2000; the mean value was $1.10 and the median was $0.35. The highest revenues per pageview were generally found in the computer hardware and software, automobile, and office products sectors while the lowest returns on pageviews were among the travel services, books/CDs/videos/DVDs, and apparel sites.

8.05 Revenue Per Pageview (Q1 2000) Percent of profiled websites

> $3.00 per Pageview > $0.10 per 4.7% Pageview $2.00 - $2.99 20.9% per Pageview 9.3%

$1.00 - $1.99 per Pageview $0.10 - $0.24 11.6% per Pageview 16.3% $0.75 - $0.99 per Pageview 7.0% $0.50 - $0.74 $0.25 - $0.49 per Pageview per Pageview 7.0% 23.3%

8.06 Revenue Per Pageview by Sector (Q1 2000) Dollars per unique visitor among profiled sites in each sector

$1.50

$1.25 $1.18 $1.05 $1.00 $0.90

$0.72 $0.75 $0.64

$0.50 $0.39 $0.29 $0.25 Gross Revenue per Pageview $0.25 $0.18 $0.17

$0.00 Apparel Autos Books, Computers Financial Gifts Home Off ice Toys & Travel Videos & Products Products Sports Services CDs

Sales and marketing were in most cases the largest expense item below the gross profit line among the profiled companies during 1999. Although it is quite possible that there is long-term brand-building value in these expenditures, it is impossible to quantitatively separate this “investment” component from the cost of acquiring new customers in the current year. Estimated customer acquisition costs were therefore calculated by dividing total 1999 sales and marketing expenditures by the number of new customers acquired during the year. By this measure, the mean cost to acquire a new customer during 1999 was $461 among the profiled companies. The median cost over the same period was $78. Several companies -- including online loan brokers E-LOAN and iOwn -- invested more than $1,000 to acquire each new customer; eliminating those companies dropped the mean cost to $185. The largest proportion of the profiled companies (29.7%) spent between $10.00 and $49.00 to acquire each new customer during 1999 and a slim majority (51.3%) spent $100.00 or less.

8.07 Customer Acquisition Cost (1999) Percent of profiled companies

$500+ < $10 8.2% 5.4%

$200 - $499 $10 - $49 21.6% 29.7%

$100 - $199 18.9% $50 - $99 16.2%

200 copyright  2000 by The Intermarket Group The eCommerce Almanac

8.08 Marketing Expenditures (1998 - Q1 2000)

FY 1998 FY 1999 Jan. - Mar. 2000 % of % of % of Company Revenue Marketing Revenue Revenue Marketing Revenue Revenue Marketing Revenue Amazon.com, Inc. $609.8 $132.7 21.8% $1,640.0 $413.2 25.2% $573.9 $140.1 24.4% Ameritrade 134.9 43.6 32.3% 268.4 59.7 22.3% 194.0 54.8 28.2% Ashford.com, Inc. 3.6 1.0 28.1% 39.9 34.6 86.7% 11.8 10.5 88.7% autobytel.com inc. 23.8 30.0 126.0% 40.3 44.1 109.6% 15.1 16.9 111.8% autoweb.com 13.0 13.0 100.0% 32.8 33.2 101.2% 15.8 14.7 92.9% BarnesandNoble.com 61.8 70.4 113.9% 202.6 111.6 55.1% 78.2 32.2 41.2% Beyond.com Corp. 36.7 27.2 74.2% 117.3 81.4 69.4% 31.3 17.0 54.2% Bluefly, Inc. 0.2 0.4 200.0% 4.9 6.5 132.1% 3.6 5.3 149.4% Bolt Inc. 2.7 0.6 23.3% 4.4 9.1 206.4% n/a n/a n/a BUY.COM, Inc. 125.3 13.4 10.7% 596.9 71.3 12.0% 207.6 24.5 11.8% CarsDirect.com Inc. 0 0 0% 15.2 14.6 96.0% 98.6 33.4 33.9% CDnow Inc. 56.4 44.6 79.0% 147.2 88.1 59.9% 45.6 23.5 51.6% drugstore.com, inc. 0 3.1 n/a 34.8 61.5 176.7% 22.7 29.9 131.6% eBay Inc. 86.1 36.0 41.8% 224.7 96.0 42.7% 85.8 33.9 39.5% Egghead.com, Inc. 356.5 62.3 17.5% 514.8 101.8 19.8% 147.8 21.9 14.8% E-LOAN Inc. 6.8 5.7 83.5% 22.1 30.3 137.1% 7.1 9.1 128.4% eToys Inc. 29.9 20.7 69.2% 151.0 120.5 79.8% 23.0 22.9 99.4% E*TRADE Group, Inc. 335.8 117.3 34.9% 621.4 301.7 48.6% 407.4 177.5 43.6% Expedia, Inc. 13.8 10.8 78.2% 38.7 14.9 38.5% 31.9 21.4 67.0% Fogdog Inc. 0.2 2.4 1200.0% 7.0 21.5 306.9% 4.7 11.2 238.7% FTD.com 30.7 6.0 19.5% 49.6 12.0 24.2% 26.6 11.5 43.4% Furniture.com Inc. 3.7 1.4 38.6% 10.9 34.0 311.3% n/a n/a n/a Garden.com, Inc. 1.3 2.4 184.6% 5.4 13.3 246.3% 3.2 8.4 267.3% HomeGrocer.com, Inc. 1.1 1.0 91.7% 21.7 7.7 35.6% 21.2 5.6 26.3% InsWeb Corp. 4.3 8.9 207.7% 21.8 33.5 153.3% 8.6 14.3 166.0% iOwn 1.3 6.1 466.4% 14.8 19.1 129.5% n/a n/a n/a iPrint.com inc. 0.6 1.0 170.2% 3.3 8.1 249.4% 3.0 8.7 287.9% NetB@nk 18.8 0.7 3.7% 56.4 7.4 13.0% 24.1 2.8 11.8% NextCard, Inc. 1.2 4.3 360.0% 26.6 24.7 92.8% 31.0 11.2 36.2% Outpost.com 22.7 5.9 26.2% 85.2 26.9 31.5% 76.1 14.6 19.2% Peapod, Inc. 69.3 7.6 10.9% 73.1 7.2 9.8% 24.9 1.3 5.4% Pets.com, Inc. 0 0 0% 5.8 42.5 734.3% 7.7 28.9 377.8% PETsMART.com Inc. 0 0 0% 10.4 33.5 320.5% n/a n/a n/a PlanetRx.com Inc. 0 0.9 n/m 9.0 55.2 613.8% 8.8 28.7 327.2% Priceline.com Inc. 35.2 24.4 69.3% 482.4 79.6 16.5% 313.8 40.4 12.9% Charles Schwab & Co. 2,736.0 155.0 5.7% 3,945.0 242.0 6.1% 1,572.0 100.9 6.4% Staples.com 16.9 2.1 12.2% 94.4 27.1 28.7% 75.4 33.2 44.1% Travelocity.com Inc. 35.5 33.4 93.9% 90.9 68.2 75.0% 35.7 24.4 68.2% Webvan Group Inc. 0 0 0% 13.3 11.7 88.3% 16.3 8.4 51.4% Source: company SEC filings

The average budget for sales and marketing among the profiled companies which are publicly-held -- or have filed a registration statement with the SEC -- was $63.31 million in 1999, up from $24.95 million in 1998; as a percentage of total revenue, expenditures were equal to 126% and 127% during 1998 and 1999 respectively. For the first quarter of 2000, annualized sales and marketing spending among the same companies averaged $119.34 million, however, expenditures as a percentage of total revenue dropped to 91%. The largest marketing budgets during 1999 belonged to Amazon.com ($413 million), E*Trade Group ($302 mn), Charles Schwab & Co. ($242 mn), eToys ($121 mn), and BarnesandNoble.com ($112 mn). In the first quarter of 2000, the biggest spenders were Amazon.com ($140 mn), E*Trade Group ($178 mn), Charles Schwab & Co. ($101 mn), eBay ($34 mn), and CarsDirect.com ($33 mn).

8.09 Marketing Budget as a Percentage of Revenue (Q1 2000) Percent of profiled companies from 8.08 above < 10% > 200% 5.7% 14.3% 10% - 24% 150% - 200% 17.1% 2.9%

100% -149% 11.4%

75% - 99% 8.6% 25% - 49% 25.7% 50% - 74% 14.3%

The mean share of revenue derived from repeat customers has increased steadily since 1997 among the profiled companies as a group. The largest proportion of companies (31%) are generating more than 75% of their online revenue from repeat customers, however, a majority (59%) still depend on new customers for 50% or more of their revenue. Companies selling consumables -- such as PeaPod, Webvan Group, and Grainger.com -- or delivering online banking and brokerage services, generally reported the highest share of revenue from repeat customers. Sites with a lower than average proportion of revenue from repeat customers generally focused on high-end durable goods or services with an extended cycle between purchases, such as autoweb.com, autobytel.com, E-Loan, and iOwn. A slight majority (52%) of purchases from the profiled companies’ websites were less than $100.00 and the overall average purchase price was $164.17 during 1999. The largest proportion of online purchases (38%) were valued between $50.00 and $99.00.

8.10 Revenue From Repeat Customers (1999) Percent of profiled companies < 10% of Revenue > 75% of 15% Revenue 31% 10% - 25% of Revenue 9%

26% - 50% of 51% - 75% of Revenue Revenue 27% 18%

202 copyright  2000 by The Intermarket Group The eCommerce Almanac

8.11 Average Order Value (1999) Percent of profiled companies

> $500 < $50 9% 14% $200 - $499 10%

$50 - $99 $100 - $199 38% 29%

Among the profiled companies, a substantial majority of pure-play Internet firms (77.9%) continue to lose money; less than one-in-four (22.1%) were profitable during 1999. Among the privately-held companies, most of whom declined to provide financial details, the results were similar with 25% reporting their Internet operations were “profitable” and 75% reporting they were “unprofitable.” The average net margin among the 57 profiled companies providing detailed financial results for 1999 was -327%. The average net margin for 1999 improves to -179% if the five profiled companies who reported net losses in excess of ten-times their total revenue -- CarsDirect.com, IMX Exchange, KBkids.com, PlanetRx.com, and Webvan Group -- are removed.

8.12 Profitability of Profiled Companies (1999) Percent of profiled companies

Profitable 22.1%

Unprofitable 77.9%

8.13 Net Margins of Profiled Companies (1999) Percent of profiled companies

"Profitable" 7.4% > (500%) 6.2% "Unprofitable" 22.3%

(201%) - (500%) 16.0% >10% 3.7%

10% - 0 (101%) - (200%) 11.2% 8.6% (51%) - (100%) 0 - (10%) 3.7% 4.9%

(26%) - (50%) (11%) - (25%) 8.6% 7.4%

204 copyright  2000 by The Intermarket Group The eCommerce Almanac

Notes

206 copyright  2000 by The Intermarket Group The eCommerce Almanac

Section 3

eCommerce Market Briefing

208 copyright  2000 by The Intermarket Group The eCommerce Almanac

1.0 The Internet User

Definitive data on the number of Internet users and the penetration rate for Internet access among U.S. households is impossible to find. Every analyst offers an estimate and no two are the same due to differing methodologies, samples, and survey periods as well as the rapid evolution of the Internet itself. In May 1999, estimates ranged from 37.2 million (Roper Starch) to 84 million (Opinion Research) individual users in the U.S. and Forrester Research estimated that approximately 34 million U.S. households had Internet access. One year later, the estimates have grown to between 80.8 million (Boston Consulting Group) and 123.6 million (Nielsen/NetRatings). Media Metrix estimates that 35.9 million Americans used the Internet on any given day during the month of March 2000 while a March 2000 poll by the Pew Research Center found that 55 million Americans are online on an average day. Cahners InStat estimates that 46% of U.S. households had Internet access at year- end 1999. The company expects 8% of PC-equipped households will go online during 2000 and that 6% of households will purchase both a PC and Internet access. Harris Interactive estimates that 81% of all computer users at the end of 1999 were already Internet users. Internet use is growing rapidly among minority groups, according to Forrester Research. The number of African-American households online will increase by 74% during 2000, followed by Caucasian households at 28% and Hispanic households at 20%. Growth in Internet use by Asian-American households is the slowest among ethnic groups, primarily because 64% of them are already online, representing the largest proportion of any group.

1.01 U.S. Internet Population

Internet Users Age of Users Date of Survey Source 123.6 mn All February 2000 Nielsen/NetRatings 121.3 mn All Year-end 1999 Cahners InStat 117.1 mn 18+ Q1-2000 Harris Interactive 115.9 mn All January 2000 Forrester Research(1) 112.9 mn 18+ Spring 2000 Mediamark Research (MRI) 110.8 mn All Year-end 1999 Computer Industry Almanac 101.8 mn All February 2000 Yankee Group (2) 95.6 mn All March 2000 PC Data Online 91.0 mn 18+ March 2000 Pew Research Center 80.8 mn All Year-end 1999 IDC 72.0 mn 18+ Year-end 1999 CyberDialogue (1) Based on estimate of 44.4mn households (2) Based on estimate of 39mn households

Although numbers for the overall Internet population vary widely, estimates of active users -- those individuals who have used the Internet at least once in the last 30 days -- are much closer among the leading firms. Nielsen/NetRatings estimates that 81.6 million individuals went online during March 2000 while Media Metrix puts the number at 76.8 million; MRI estimated the number of adults (18 years or older) who used the Internet during the last 30 days at 86.3 million based on a Spring 2000 survey. The penetration rate of Internet access varies significantly between markets, according to Nielsen/NetRatings. Among the top 20 markets alone, the penetration rate in February 2000 swung from 61% in the San Francisco metro area down to 37% in Cleveland. The nationwide penetration rate ranges from Harris Interactive’s estimate of 56% of households to CyberDialogue’s estimate of 32%. CyberDialogue has also copyright  2000 by The Intermarket Group 209 The eCommerce Almanac

1.02 Top 5 Markets by Internet Access (1999) Percent of households within each market

Metro Area Penetration Rate No. of Users Time Online San Francisco, California 61.0% 2,199,000 10:17:44 hrs San Diego, California 58.0% 894,000 11:15:52 hrs Washington, DC 56.1% 1,850,000 9:28:58 hrs Seattle, Washington 55.9% 1,324,000 9:11:50 hrs Portland, Oregon 54.0% 816,000 9:13:21 hrs Boston, Massachusetts 51.7% 1,995,000 8:00:39 hrs Source: Nielsen/NetRatings

identified a growing segment within the category of adults without Internet access: an estimated 27.7 million individuals who have tried the Internet and subsequently discontinued use; approximately 9 million of these individuals, however, indicated that they expect to go back online at some point soon.

1.03 U.S. Internet Population Growth Millions of Internet users at end of period

200 177.0

148.6 150 126.0

103.1 100 80.8 62.8

50 38.9 23.2 9.7

0 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: IDC

Cahners InStat predicts that women will comprise 49% of Internet users by mid- 2000, up from 45% at the beginning of the year. Nielsen NetRatings and the Pew Research Center both estimate that the number of women and men using the Internet is already at parity while Mediamark estimates that women actually comprise a slim majority (50.2%). The number of female users increased by 32% during 1999, according to NetRatings, while the number of men grew by only 20%. Although Pew estimates the number of men and women online are roughly equivalent, the group also found that men use the Internet more frequently; on an average day, only 47% of Internet users are women while 53% are men. As the Internet has become more mainstream, the demographics of its users have

210 copyright  2000 by The Intermarket Group The eCommerce Almanac

1.04 Gender of Internet Users Percent of all U.S. Internet users

Women Online Men Online Date of Survey Source 49.0% 51.0% March 2000 Strategis Group 49.5% 50.5% March 2000 Pew Research Center 50.2% 49.8% Spring 2000 Mediamark Research 45.0% 55.0% Year-end 1999 Cahners InStat 50.0% 50.0% Year-end 1999 Nielsen/NetRatings 47.4% 52.6% Fall 1999 PC Data Online 48.0% 52.0% Nov. 1999 BCG 48.0% 52.0% Nov. 1999 Media Metrix

begun to look more like those of the U.S. at large. The proportion of Internet users with college degrees has declined from 39.6% in the Fall of 1999 to 33.6% in the Spring of 2000, according to Mediamark. The company also estimates the number of users with a household income of $50,000 or less has increased from 33.1% to 38.3% during the same period.

1.05 Education of Internet Users (Spring 2000) Percent of all U.S. Internet users

College graduate 26.9%

No college 36.0%

Attended college 37.0% Source: Mediamark CyberStats

1.06 Household Income of Internet Users (Spring 2000) Percent of all U.S. Internet users < $50,000 38.2% > $150,000 6.7%

$75,000 - $149,999 $50,000 - 29.4% $74,999 25.7%

Source: Mediamark CyberStats

A Fall 1999 estimate of Internet users’ household incomes by PC Data Online is significantly lower than Mediamark’s; almost one-in-four (22.9%) had a household income of less than $25,000 and 66.2% had a household income of less than $50,000. Only 3.1% had a household income of more than $150,000, according to PC Data Online. The company also estimates the number of individuals with no college education at 42.4% and the number of college graduates at 24.5%, compared to Mediamark’s estimates of 32.8% and 33.6% respectively.

1.07 Age of Internet Users (Spring 2000) Percent of all U.S. Internet users < 17 years > 45 years 18.7% 21.5%

18 - 24 years 18.1% 35 - 44 years 21.0%

25 - 34 years 20.7% Source: PC Data Online

Baby-boomers and seniors -- individuals between 45 and 64 years old -- were the fastest-growing age groups during 1999, expanding to approximately 20% of Internet users according to Media Metrix, while the proportion of users between 25 and 44 declined. Jupiter Communications paints a portrait of U.S. Internet users as 47% are college graduates, 80% are less than 50 years old -- with the largest age group between 19 and 34 -- 43% have an annual household income of more than $60,000, and 37% are involved in professional or managerial occupations. Almost four-in-five Internet users have been online for more than one year, according to both Boston Consulting Group and PC Data Online. PC Data estimates that 42% of Internet users have been online for more than three years and that 15% have been online for more than five years. The Pew Research Center’s Pew Internet & American Life project found that approximately 28% of Internet users had been online for three or more years.

1.08 Number of Years Online (Q4-1999) Percent of all U.S. Internet users < 1 Year > 3 Years 22% 29%

1 - 3 Years 49% Source: Boston Consulting Group 212 copyright  2000 by The Intermarket Group The eCommerce Almanac

1.09 PC Penetration Rate by Location

Use PC at home Use PC at work Use PC at other location

80%

60% 51% 47% 42% 39% 41% 40% 40%

26%

% of adults% (18+) 23% 20% 17%

0% January 1998 January 1999 December 1999 Source: Harris Interactive

More than one-half (51%) of adults in the U.S. used a PC at home at the end of 1999, according to Harris Interactive, up from 42% one year earlier. PC Data Online estimates that 58% of U.S. households in March 2000 had a computer and Ziff-Davis estimates the number at just over 60% for the same point in time. The penetration rate for PCs is higher than average among families and higher-income households. The rate of PC ownership in households with children is almost 70%, according to Ziff-Davis, and it exceeds 70% among households with more than $75,000 total income; conversely, the Ziff-Davis data indicates that PC ownership drops below 40% among households with total income of $30-$40,000 and less than 20% among those with a household income below $10,000.

1.10 Top 10 Markets by PC Penetration (1999) Percent of households within each market

Salt Lake City, UT 73%

San Francisco, CA 72%

Washington, DC 71%

Seattle, WA 69%

Portland, OR 69%

Aus tin, TX 69%

Denver, CO 68%

Boston, MA 66%

San Diego, CA 64%

Sacramento, CA 63%

0% 25% 50% 75% 100%

Source: Scarborough Research

The average PC penetration rate among households was 59% across 64 U.S. markets surveyed in 1999 by Scarborough Research. Markets with the highest penetration rates are Salt Lake City, San Francisco, and Washington, DC. The lowest penetration rates are in Memphis, TN (49%), Pittsburgh, PA (48%), Birmingham, AL (48%), Wilkes- Barre, PA (47%), and Charleston, WV (46%). Almost one-in-five (19%) of the households that did not already own a computer at the time of survey planned to buy one sometime during the next 12 months, according to Scarborough Research.

2.0 Internet User Activities

Although specific numbers vary from survey to survey, the consensus is that significantly more Americans access the Internet from home than from work. Harris Interactive estimates that 48% of the adults who are online access the Internet primarily from home while only 30% do so primarily from work, and 21% from other locations such as school and the library. PC Data Online estimates that 6.7% of users access the Internet primarily from home-based offices. MediaMark estimates that 69% of adults have Internet access at home and that 45% have access at work.

2.01 Where Do Users Access The Internet Percent of adults who are online

60%

48%

40% 30%

21% 20%

0% Home Work Other

Source: Harris Interactive

Although the proportion of men and women using the Internet is at or near parity, men generally spend more time online than women. Men spent an additional two hours twelve minutes online on average during December 1999, up from one hour thirty-five minutes in February 1999, according to Nielsen/NetRatings. The amount of time spent online is also correlated with the level of experience an individual has with the Internet, according to Boston Consulting Group. The company estimates that individuals who have used the Internet for three or more years spend an average of 2.9 hours per week online while those who began using the Internet during 1999 spent an average 2.7 hours per week online. America Online reports that its subscribers spend an average 65 minutes online per day.

214 copyright  2000 by The Intermarket Group The eCommerce Almanac

2.02 Total Time Spent Online (1999)

Time Online Date of Survey Source 2.31 hours per week Q1-2000 Harris Interactive 2.82 hours per week Year-end 1999 Cahners InStat 2.70 hours per week Year-end 1999 Boston Consulting Group 1.87 hours per week December 1999 Nielsen/NetRatings 2.12 hours per week December 1999 Media Metrix

The amount of time users spend online varies between different age groups and different geographic locations. Individuals between the ages of 25 and 35 years old spend the most time online -- 2.7 hours per week compared to a mean of 2.1 hours -- according to Media Metrix, while individuals between 18 and 24 are online the least -- 1.3 hours per week. Nielsen/NetRatings reports that the amount of time spent online varies by geography almost as much as it does between different age groups. Among 20 different U.S. metro areas tracked by NetRatings in the forth quarter of 1999, individuals in San Diego and Denver generally spent the most time online -- 2.6 and 2.5 hours per week

2.03 Time Spent Online by Metro Area (1999) Total time in hours and minutes

Tampa 7:12:30

Minneapolis 7:23:21 Atlanta 7:38:28 Phoenix 7:40:01

Boston 8:00:39 Chicago 8:11:23

New York 8:39:30 Philadelphia 8:55:26 Los Angeles 9:09:43

Seattle 9:11:50 Portland 9:13:21

Cleveland 9:27:17 Washington, DC 9:28:58 Detroit 9:46:18

Dallas 9:46:52 Miam i 9:49:17

Houston 9:54:52 San Francisco 10:17:44 Denver 10:46:51

San Diego 11:15:52

0:00:00 3:00:00 6:00:00 9:00:00 12:00:00 15:00:00 Time online per month (Hrs:Min:Sec)

Source: Nielsen/NetRatings

2.04 Time Spent Online by Age Group Minutes per month per person

1,000

800 704.9 617.2 583.5 600

400 347.8

Minutes online month per Minutes 200

0 18 - 24 25 - 35 35 - 44 45 - 64

Source: Media Metrix

respectively -- while individuals in Tampa and Minneapolis spent the least amount of time online -- approximately 1.7 hours per week. Internet users in the high-tech centers of Seattle and the San Francisco Bay Area spent an average 2.1 and 2.4 hours per week online respectively. The total time spent online by the average Internet user has increased steadily since the beginning of 1999, according to NetRatings, from an average 1.97 hours per week at the beginning of February 1999 to 2.9 hours during the first week of June 2000. The NetRatings data also indicates that Internet users spent an average 2.7 hours online per week -- and viewed an average 155.3 pages per week -- over the 16 month period between January 31, 1999 and June 4, 2000. Total pages viewed during the period fluctuated between a low of 185 during the week of January 10, 2000 and a high of 222 during the week of April 17, 2000.

2.05 Total Time Spent Online at Home and Pages Viewed (1999-2000) Time spent online in minutes and pageviews per user per week

page views time online

300 250

250 200 Time online perTime week

200 150 150 100 100 Pageviews per week per Pageviews 50 50

0 0 1/3 - 1/9 - 1/3 1/31 - 2/6 - 1/31 4/11 - 4/5 5/2 - 4/26 6/13 - 6/7 7/4 - 6/28 8/15 - 8/9 9/5 - 8/30 3/6 - 3/12 - 3/6 4/2 - 3/27 5/14 - 5/8 6/4 - 5/29 2/21 - 2/27 - 2/21 3/21 - 3/15 5/23 - 5/17 7/25 - 7/19 9/26 - 9/20 11/7 - 11/1 1/24 - 1/30 - 1/24 2/20 - 2/14 4/23 - 4/17 10/11 - 10/17 - 10/11 11/28 - 11/22 12/19 - 12/13 Source: Nielsen/NetRatings

216 copyright  2000 by The Intermarket Group The eCommerce Almanac

2.06 Time Spent Online per Session at Home (1999-2000) Minutes per user per week

20 1/3 - 1/9 - 1/3 1/31 - 2/6 - 1/31 4/11 - 4/5 5/2 - 4/26 6/13 - 6/7 7/4 - 6/28 8/15 - 8/9 9/5 - 8/30 3/6 - 3/12 - 3/6 4/2 - 3/27 5/14 - 5/8 6/4 - 5/29 2/21 - 2/27 - 2/21 3/21 - 3/15 5/23 - 5/17 7/25 - 7/19 9/26 - 9/20 11/7 - 11/1 1/24 - 1/30 - 1/24 2/20 - 2/14 4/23 - 4/17 10/11 - 10/17 - 10/11 11/28 - 11/22 12/19 - 12/13 Source: Nielsen/NetRatings The average online session between January 1999 and June 2000 was 28.7 minutes in duration, according to NetRatings. The average session length varied from a low of 25.2 minutes for the week of March 22, 1999 to a high of 31.3 minutes during the week of January 24, 2000.

2.07 Leading Online Activities (2000) Percent of all Internet users

E-mail 91% Get information for hobbies 76% Research a product or service 74% Get travel information 64% Retrieve news 60% Get health or medical information 54% Purchase a product 48% Send an instant message 45% Get financial news/information 44% Search job opportunities 38% Make a travel reservation 36%

Listen to or download music 35% Check sports scores 35% Get real estate information 27% Bank online 17% Participate in an auction 15%

Trade stocks 12%

0% 20% 40% 60% 80% 100%

Source: Pew Internet & American Life copyright  2000 by The Intermarket Group 217 The eCommerce Almanac

As the tenure of Internet users increases, their online activity becomes more deliberate and time spent randomly “surfing the web” declines, according to PC Data. Three-in-four Internet users surveyed by the company in late 1999 either strongly agreed (33.4%) or agreed somewhat (42.0%) with the statement: “I typically go onto the web because I have a specific task or objective in mind.” The most popular Internet activity is communicating by e-mail, with more Internet users engaged in sending and receiving e-mail (91%) than any other online activity, according to the Pew Research Center. Eighty-one percent of Internet users indicated that communicating with friends/family/others was one reason for initially going online and 38% said it was their top reason, according to Boston Consulting Group. Researching topics of interest was the next most commonly mentioned reason for going online, cited by 76% as one reason and by 13% as the top reason; shopping online was cited by 26% as one reason and by 2% as the top reason while managing personal finances -- online banking and trading stocks online -- were cited by 15% as one reason and by 2% as the top reason. Almost one-in-four (23.5%) Internet users indicate that they go online most frequently for the purpose of sending e-mail, according to PC Data, followed by searching for information (14.9%) and downloading software/files (10.6%). Almost three-in-four (74%) Internet users use the Internet to research products/services and 48% actually make purchases online, according to Pew, while 17% do their banking online, and 12% trade stocks online. PC Data reports that shopping online and checking stock quotes/trading online were the most frequent online activities of 4.6% and 3.4% of Internet users respectively. The typical Internet users divides his or her time online between sending and receiving e-mail (33% of total time spent online), engaging in other forms of communication (e.g., chat, instant messaging, etc.) (10%), gathering information (27%), playing games and visiting entertainment sites (13%), managing personal finances (8%), and researching products/services and making online purchases (8%), according to Boston Consulting Group.

3.0 Leading Internet Sites and Brands

3.01 Leading Internet Commerce Sites (March 2000) Number of unique visitors per month (000s)

amazon.com 14,812

ebay.com 14,032

cdnow.com 6,654

barnesandnoble.com 5,401

ticketmaster.com 4,223

iprint.com 3,865

enews.com 3,395

bmgmusicservice.com 3,099

ubid.com 2,749

buy.com 2,378

0 5,000 10,000 15,000 20,000

Source: PC Data

218 copyright  2000 by The Intermarket Group The eCommerce Almanac

Amazon.com and eBay are the busiest Internet commerce sites with almost twice as many unique visitors as the next closest sites -- CDnow and BarnesandNoble.com -- according to PC Data. In the financial services sector, credit card issuer NextCard is the busiest site followed by online brokers E*Trade and Ameritrade and competitor Aria.com. Priceline.com and Expedia are the busiest individual sites in the travel sector, according to PC Data. The total traffic of the Travelocity.com and Preview Travel sites -- whose respective owners merged late last year -- when combined, however, places that enterprise ahead of both Priceline.com and Expedia with approximately 20% more unique visitors.

3.02 Leading Financial Services Sites (March 2000) Number of unique visitors per month (000s)

nextcard.com 5,181

etrade.com 2,461

ameritrade.com 1,867

aria.com 1,724

firstusa.com 1,563

fidelity.com 1,519

americanexpress.com 1,322

wellsfargo.com 1,320

bankofamerica.com 1,199

paymybills.com 1,158

0 1,000 2,000 3,000 4,000 5,000 6,000

Source: PC Data

3.03 Leading Travel Services Sites (March 2000) Number of unique visitors per month (000s)

priceline.com 6,050

expedia.com 4,396

AOLTravel 3,730

travelocity.com 3,479

previewtravel.com 2,851

0 2,000 4,000 6,000 8,000

Source: PC Data

3.04 Leading Portal Sites (March 2000) Number of unique visitors per month (000s)

yahoo.com 39,569 aol.com 37,987 msn.com 27,426 go.com 23,039 lycos.com 20,082 tripod.com 16,571 excite.com 16,353 altavista.com 14,519 about.com 13,116 ask.com 13,113

0 10,000 20,000 30,000 40,000 50,000

Source: PC Data

The top four Internet commerce brands increased their name recognition by an average 30 percentage points among adults in the U.S. between September 1998 and August 1999, according to Opinion Research. Amazon.com is the best known Internet commerce brand with its name recognized by almost two-thirds of U.S. adults (60.1%). Priceline.com, eBay, E*Trade, and eToys round out the top five properties which are recognized by an average 46% of all U.S. adults. eBay was the most successful among the companies tracked at improving its brand during 1999, increasing its name recognition more than eight-fold.

3.05 Brand Recognition Of Internet Commerce Sites (1998 and 1999) Recognition among all U.S. adults

August 1999 April 1999 September 1998 Brand Awareness Adults (000s) Awareness Adults (000s) Awareness Adults (000s) Amazon.com 60.1% 117,800 51.7% 101,300 37.4% 72,500 Priceline.com 55.4% 108,600 46.5% 91,100 32.2% 62,500 eBay 46.4% 90,900 32.2% 63,100 5.7% 11,000 E*Trade 43.8% 85,800 29.9% 58,600 12.8% 24,800 eToys 26.2% 51,300 21.6% 42,300 Not Sampled Autobytel.com 22.6% 44,300 17.9% 35,000 14.8% 28,700 CDnow 20.2% 39,600 17.2% 33,700 18.8% 36,500 Reel.com 19.4% 38,000 14.9% 29,200 18.2% 35,300 Buy.com 17.8% 34,900 13.2% 25,900 Not Sampled Travelocity 15.6% 30,600 10.0% 19,600 7.5% 14,500 Cheap Tickets 15.0% 29,400 10.3% 20,200 Not Sampled Onsale (1) 12.4% 24,300 9.3% 18,200 8.8% 17,000 Preview Travel (2) 10.6% 20,800 9.2% 18,000 9.5% 18,400 uBid Not Sampled 8.5% 16,700 Not Sampled Expedia 9.1% 17,800 8.3% 16,300 4.6% 8,900 NetMarket 7.4% 14,500 6.1% 12,000 8.0% 15,500 (1) Merged with Egghead.com Inc. in 1999 (2) Merged with Travelocity.com Inc. in 2000 Source: Opinion Research Corp.

220 copyright  2000 by The Intermarket Group The eCommerce Almanac

4.0 Sizing B-to-C Internet Commerce

Estimates of the number of individuals who completed online purchases during 1999 vary in a manner similar to estimates of the overall population of Internet users. Yankee Group offers the most aggressive estimate (58.4 million) and investment bankers Volpe Brown the most conservative (30 million). Yankee also estimates that the top 25% of online buyers accounted for 84% of all spending between September 1999 and February 2000. Harris Interactive estimates that 26.8 million individuals made at least one purchase each month during the first quarter of 2000, up from 23.3 million in the previous quarter.

4.01 Estimated U.S. Population of Online Buyers Number of individuals completing at least one online purchase during specified period

Online Buyers Period Covered Source 58.4 mn Calendar 1999 Yankee Group (1) 49.3 mn Calendar 1999 Direct Marketing Association 43.2 mn 3/1999 - 3/2000 Pew Research Center 41.2 mn Q4 ‘98 - Q4 ‘99 Boston Consulting Group 39.3 mn Calendar 2000 Jupiter Communications (2) 37.8 mn Q4 ’98 - Q4 ‘99 Ernst & Young 37.1 mn Calendar 1999 Forrester Research (3) 30.0 mn Calendar 1999 Volpe Brown Whelan 26.8 mn 1/2000 - 3/2000 Harris Interactive (4) 1. Based on 26.8mn households; 2. Forecast 3. Based on 17mn households; 4. Purchasers per month

Ernst & Young estimates that approximately one-half of the U.S. households that are online made at least one online purchase during 1999, generating an estimated $25-30 million in total sales. Among the remaining 50%, more than three-in-four (79%) expect to make at least one online purchase during 2000 and an average of four online purchases. Online purchases accounted for approximately 1% of overall consumer spending during 1999, according to Gartner Group, which also predicts that the share will increase to 5-7% by 2004.

4.02 Total U.S. Consumer Internet Commerce: 1999 - 2003 (Billions $)

Source 1999 2000 2001 2002 2003 Jupiter Communications $14.9 $23.1 $34.6 $53.0 $78.0 Gartner Group $16.8 $29.3 Morgan Stanley $19.0 CyberDialogue $19.2 $29.2 $41.1 $53.0 $65.6 Forrester Research $20.2 $38.8 $64.2 $101.1 $144.0 Dataquest $20.5 $25.0 $39.3 $57.0 $115.0 Salomon SmithBarney $22.2 $41.1 $69.6 107.1 $150.5 Giga Information (1) $22.2 $51.2 $90.3 $124.8 Yankee Group $24.2 $36.6 $57.2 $86.6 $125.6 IDC $24.8 $36.8 $48.1 $60.6 $75.0 Simba $25.7 $39.8 $56.9 $78.0 $108.5 Boston Consulting Group $33.1 $66.1 1. Figures represent the mean value of company’s high and low estimates for each period.

Jupiter Communications predicts that consumer online spending will total $199 billion in 2005 and that offline spending influenced by online research will total $632 billion during the same year. The company estimates that 68% of consumers have already researched products online and then purchased them in a store; consumers will spend more than $235 billion offline during 2000 as a direct result of online research, according to Jupiter. Consumers appear to be increasingly comfortable with the concept of Internet commerce as evidenced by the shrinking time lag between when an Internet user first goes online and when they make their first purchase. Consumers who initially went online more than four years ago took an average 22 months before making their first online purchase while individuals going online in 1998 took an average 13 months to make their first purchase and individuals who started using the Internet in 1999 took an average four months before making their first purchase, according to data from ActivMedia and CyberDialogue. ActivMedia also reports that many new users in 1999 made their first online purchase within as little as a month after initially going online.

4.03 Consumer Internet Commerce Spending by Category (Q1-2000) Thousands of dollars

Air Tickets $1,107,373 Computer Hardware $694,967 Other $635,527 Hotel Reservations $591,625 Books $511,369 Apparel $475,091 Software $430,494 Mus ic $395,804 Consumer Electronics $395,342 Health and Beauty $386,628 Toys/Video Games $343,866 Car Rental $286,337 Office Supplies $282,726 Food/Beverages $276,372 Videos $248,188 Jewelry $207,398 Linens/Home Décor $151,403 Flowers $148,064 Sporting Goods $145,595 Footwear $117,005 Small Appliances $103,678 Furniture $98,489 Tools and Garden $85,881 Appliances $36,370

$0 $250,000 $500,000 $750,000 $1,000,000 $1,250,000 $1,500,000

Source: Forrester Research

222 copyright  2000 by The Intermarket Group The eCommerce Almanac

4.04 Top Consumer Internet Commerce Categories (Q1-2000) Thousands of dollars

Category January February March Q1-2000 Air Tickets $317,608 $280,046 $509,719 $1,107,373 Computer Hardware $224,363 $152,878 $317,726 $694,967 Other $173,128 $190,008 $272,391 $635,527 Hotel Reservations $163,787 $149,497 $278,341 $591,625 Books $224,367 $147,986 $139,016 $511,369 Apparel $181,560 $150,592 $142,939 $475,091 Total across 24 categories $2,784,503 $2,356,964 $3,014,125 $8,155,592 Source: Forrester Research

Total consumer Internet commerce spending was $8.16 billion in the U.S. during the first three months of 2000, according to Forrester Research. Airline tickets ($1.1 billion in sales) and computer hardware ($695 million) were the largest consumer categories. Travel-related spending of all types accounted for almost one of every four dollars spent by consumers online during the first quarter -- $1.99 billion or 24.3% of all consumer spending.

4.05 Online Purchasing Penetration (1999) Percent of all Internet users

Books 22%

Computer Software 15%

CDs & Videos 15%

Travel 11%

Apparel 10%

Computer Hardware 9%

Electronics 4%

Toys 4%

Office Supplies 3%

Healty & Beauty Aids 3%

Jewelry & Accessories 2%

Food & Groceries 2%

Home Furnishings 2%

Sporting Goods 2%

Appliances 1%

Lawn & Garden 1%

0% 5% 10% 15% 20% 25%

Source: Boston Consulting Group

Total online spending by U.S. consumers declined sharply from January to February 2000, according to Forrester, before recovering in March. Spending in small-ticket categories (i.e., music CDs, videos, jewelry, and sporting goods) softened throughout the entire quarter, declining by an average 21.8% from January to March, with the largest declines occurring in the software (down 45.1%), toy (down 40.7%), and book (down 38.0%) categories. Spending in Forrester’s so-called big-ticket categories, however, increased by an average 60.7% during the same period. The biggest increases occurred in the appliances (up 136.3%), hotel reservations (up 69.9%), and the food/beverages (up 68.5%) categories. The increase in spending for big-ticket items more than offset declines among small ticket items, according to the company, which estimates that overall monthly online spending by consumers increased 9.2% between January and March. Airline tickets and computer hardware are the two largest categories in terms of dollars spent online by consumers -- accounting for 16.9% and 10.5% of total spending respectively -- but they only rank fourth and sixth respectively in terms of the number of individuals who have purchased them, according to Boston Consulting Group. The most popular categories among online buyers are books -- almost one-in-four Internet users have made a purchase in the category despite the fact that it accounts for only 4.6% of total online sales during the first quarter -- followed by computer software (3.4% of total spending) and videos/music CDs (6.4% of total spending) which have each been purchased by an estimated 15% of Internet users.

4.06 Number of Online Purchases Per Buyer (1999) > 40 10%

26 - 40 1 - 5 12% 32%

16 - 25 15%

6 - 10 11 - 15 19% 12% Source: Boston Consulting Group

4.07 Total Spending Per Online Buyer (1999)

> $4,000 9%

$2,001 - $4,000 < $200 10% 32%

$1,001 - $2,000 13%

$201 - $500 $501 - $1,000 20% 16%

Source: Boston Consulting Group

224 copyright  2000 by The Intermarket Group The eCommerce Almanac

The average online buyer completed 10 purchases during 1999 and spent $460.00, according to Boston Consulting Group. The Direct Marketing Association estimates the value at $559.00. Ernst & Young estimates the average number of purchases at 13 with a significantly higher total value of $1,205.00; approximately 52% of buyers spent less than $500.00 and the balance (48%) spent $500.00 or more during 1999. Thirty- five percent of online buyers completed between one and four purchases, 26% completed between five and ten, and 39% completed more than 10 purchases last year, according to Ernst & Young. The total amount spent online and the average transaction amount are both highly correlated with the tenure of Internet users, according to ActivMedia. The average online transaction by individuals who have been online five or more years is more than twice that of individuals online less than two years. ActivMedia also reports that the online share of Internet users’ total purchases increases with the length of time they have been online.

4.08 Average Transaction Value by Category (Q1-2000) Dollars per transaction

Appliances $385.27 Air tickets $367.42 Furniture $257.24 Hotel reservations $225.96 Computer hardware $225.15 Car rental $188.24 Consumer electronics $161.70 Other $106.93 Food/beverages $80.43 Sporting goods $73.35 Linens/home decor $72.44 Apparel $72.44 Jewelry $60.86 Small appliances $59.70 Footwear $57.54 Office supplies $55.25 Flowers $53.28 Tools and hardware $50.06 Toys/videogames $41.84 Software $37.93 Health and beauty $37.71 Books $32.84 Videos $31.33 Mus ic $30.87

$0 $100 $200 $300 $400 $500

Source: Forrester Research

The average online business-to-consumer transaction during the first quarter of 2000 was $115.24, according to Forrester Research. The average transaction size was less than $70.00 in one-half of the product categories tracked and less than $100.00 in two- copyright  2000 by The Intermarket Group 225 The eCommerce Almanac

thirds. Categories with the highest average transaction were appliances ($385.27), airline tickets ($367.42), and furniture ($257.24). The smallest average transactions occurred in the books ($32.84), videos ($31.33), and music ($30.87) categories.

4.09 Total U.S. Online Holiday Spending: Q4 1999 vs. 1998 (Billions $)

1999 1998 Source $8.5 bn $4.1 bn Dataquest $11.0 bn $3.7 bn Boston Consulting Group $8.5 bn $3.0 bn Volpe Brown Whelan $8.3 bn $2.6 bn Yankee Group $7.8 bn $3.9 bn CyberDialogue $7.2 bn ActivMedia $7.0 bn $3.1 bn Jupiter Communications (1) $7.1 bn $4.2 bn IDC $6.9 bn Harris Interactive $5.0 bn $3.0 bn Forrester Research (2) $4.5 bn PC Data (3) (1) Figure covers November and December only (2) 1999 figure covers 11/25/99 - 1/1/00; 1998 figure covers entire quarter (3) Figure covers 10/31/99 - 12/19/99

The amount spent online by consumers during the holiday shopping period increased from approximately $3.5 billion in 1998 to $7.8 billion during 1999. Holiday 1999 sales are estimated to have accounted for between 25% (Forrester Research) and 47% (Jupiter Communications) of the year’s total online consumer sales. Jupiter estimates that approximately 10 million individuals began shopping online during 1999 and that many of them made their first purchases during the holiday season. Ernst & Young estimates that one-in-four (26%) Internet users made at least one online purchase during the holiday shopping season, spending a total of $10-13 billion. America Online reports that two-thirds of its 20+ million members shop online and that 2.5 million of them made their first online purchase during the 1999 holiday season. AOL members collectively spent approximately $2.5 billion online between Thanksgiving and Christmas, according to the company. Greenfield Online estimates that the average online shopper spent $357 for gifts; 29% spent less than $100, 43% spent between $100 and $399, and 7% spent more than $1,000.

4.10 Weekly U.S. Online Holiday Spending (1999) Millions of dollars

$1,500

$1,254.6 $1,200

$904.8 $884.4 $900

$545.1 $600 $494.8

$274.2

Sales per week ($ '000,000s) week ($ per Sales $300 $199.3 $221.7 $208.2

$0 Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5 Dec. 12 Dec. 19 Dec. 26

Source: PC Data

226 copyright  2000 by The Intermarket Group The eCommerce Almanac

5.0 Internet Shopper/Purchaser Behavior

5.01 How Internet Users Find Websites Percent of all Internet Users

Search Engines/Portals 28.2%

Friends/Colleagues 18.7%

Links on Other Sites 17.8%

Online Ads 16.8%

E-Mail Ads 14.0%

Television Ads 13.2%

Print Ads 10.5%

Radio Ads 4.6%

Outdoor Ads 3.0%

0% 10% 20% 30% 40%

Source: PC Data, IDC, Ernst & Young, Andersen Consulting

Search engines and portals remain the most frequently used point of entry with 28% of Internet users using them to learn about new websites, according to several surveys during 1999 and the first quarter of 2000. The value of branding, however, is becoming increasingly apparent with 19% of Internet users learning about new sites from friends and colleagues; Boston Consulting Group also estimates that 43% of online buyers have entered Internet commerce sites from bookmarks and 31% have typed-in a URL directly. This suggests that many buyers are developing loyalties to specific Internet commerce sites.

5.02 Browser to Buyer Conversion Rate (March 2000) Percent of top 40 Internet commerce sites

< 2.5% > 10.0% 5% 23%

2.5% - 5.0% 27% 7.6% - 10.0% 25%

5.1% - 7.5% 20% Source: PC Data

The average browser-to-buyer conversion rate in March 2000 among the 40 largest consumer Internet commerce sites -- based on traffic -- was an estimated at 7.7%, according to PC Data, and the median conversion rate was 7.2%. The largest proportion of the sites tracked converted between 2.5-5% of unique visitors into buyers. The company also found that buyers spent considerably more time on a given site than their counterparts who were simply “kicking the tires.” Buyers, on average, viewed almost three times as many pages as browsers, according to PC Data. Boston Consulting Group reports that the average browser-to-buyer conversion rate was 3.2% during 1999 among 412 online retailers that it surveyed for the trade association, Shop.org. The same group of companies reported an average conversion rate of 2.8% for 1998. In a similar survey of 41 leading Internet commerce sites, Forrester Research found that conversion rates ranged from 1-4% and that 70% of the sites reported conversion rates of less than 2%.

5.03 Browser to Buyer Conversion Rate Trend (6/99 - 3/00) Average percent of unique visitors

11% 10.2% 9.7% 10% 9.2% 8.8% 9% 9.5% 8.2% 8% 7.6%

7.6% 7% 7.4% 6.6% 6% Avg. browser to buyer rate buyer browser to Avg. 5%

4% Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00

Source: PC Data

The average browser-to-buyer conversion rate among a cross-section of leading consumer Internet commerce sites fluctuated between 6.6% and 10.2% over a ten month period between June 1999 and March 2000, according to data from PC Data. Conversion rates rose fairly steadily from mid-summer 1999 and peaked in December during the holiday shopping season. In the post-holiday period, conversion rates declined sharply before recovering somewhat in February 2000. The analysis covers the websites of Amazon.com, CDnow, eToys, Ticketmaster Online, 1-800- Flowers.com, BarnesandNoble.com, Buy.com, Drugstore.com, eNews, Gateway Computer, PlanetRx.com, Staples.com, SmarterKids.com, and J. Crew.

228 copyright  2000 by The Intermarket Group The eCommerce Almanac

5.04 Why Buyers Make Online Purchases Percent all of buyers in each category

First online purchase Subsequent online purchases

Don't know or no 21% answer 9%

8% Other 11%

Product availability or 13% better selection 11%

15% Price 23%

Convenience of home 2% delivery 23%

9% Saves time 1%

10% Ability to shop 24/7 3%

10% Avoid in-store hassle 4%

12% Ease of process 15%

0% 5% 10% 15% 20% 25% 30%

Source: Boston Consulting Group

Online shopping is an increasingly popular activity among Internet users. Indeed, the ability to shop and make purchases online is among the reasons why more than one- in-four (26%) individuals began using the Internet in the first place, according to PC Data. Boston Consulting Group reports that some aspect of convenience is the principal motivator behind many Internet users’ first online purchase, including home delivery -- cited by 23% of first-time buyers -- the overall ease on online shopping (15%), the ability to avoid in-store hassles (4%), and the 24-hour accessibility of online storefronts (3%). Price considerations are the next most-frequently mentioned motivator, cited by 23% of buyers as the principal reason behind their first online purchase. The principal motivator for many buyers changes somewhat after they complete their first online purchase. Convenience generally remains the number one motivator, but digging deeper reveals that time savings jumps from the principal motivator for 1% of first-time buyers to 9% of repeat buyers and the ability to shop anytime 24-hours a day jumps from 3% to 10%. Pricing was the principal motivator for fewer repeat buyers (15%) than first-time buyers (23%) but nevertheless was cited by more individuals than any other consideration.

6.0 Sizing B-to-B Internet Commerce

6.01 Total U.S. Business-to-Business Internet Commerce: 1999 - 2003 (Billions $)

Source 1999 2000 2001 2002 2003 IDC (1) $50 $97 $175 $347 $633 Forrester Research (2) $109 $251 $499 $843 $1,331 Goldman Sachs (2) $115 $294 $522 $782 $1,113 Jupiter Communications (2) n/a $336 $700 $1,510 $2,940 Gartner Group (3) (4) $145 $403 $953 $2,180 $3,950 Boston Consulting Group (3) $892 $1,187 $1,579 $2,099 $2,785 1. Value of transactions at least initiated over the Internet 2. Value of transactions completed through Net Markets or directly between counterparties over the Internet 3. Value of all completed sell-side e-commerce transactions, including through EDI, extranets, Net Markets, web storefronts, and direct flat file IP exchanges 4. Global Internet commerce activity.

Analysts unanimously agree that business-to-business activity accounts for the overwhelming majority of total Internet commerce. Forrester Research estimates that 86% of Internet commerce activity during 1999 was between businesses and only 14% was business-to-consumer. The company also predicts that the share of B-to-B activity will increase to 92% by 2003. U.S. markets accounted for an estimated 63% of global B-to-B Internet commerce during 1999, according to IDC, which also predicts that the U.S. share will decline to 56% in 2003. Chemicals, computer products, and agriculture are the largest sectors in B-to-B Internet commerce, according to Goldman Sachs, which estimates total U.S. activity for each during 1999 at $26.6 billion, $22.0 billion, and $16.6 billion respectively. The company predicts that total U.S. B-to-B activity will expand almost nine-fold between 1999 and 2003. Sectors expected to expand the most rapidly during that period are government procurement, motor vehicles and parts, and paper and office products. Conversely, sectors expected to grow the slowest are construction and real estate, consumer products, and non-defense electronics.

6.02 Top Business-to-Business Internet Commerce Sectors (2000) Billions of dollars

Chemicals $76.1

Computer Hardware $54.0 and Software

Agriculture $34.6

Energy $29.0

Government $16.1 Procurement

Aerospace/Defense $15.0

$0 $20 $40 $60 $80 $100

Source: Goldman Sachs

230 copyright  2000 by The Intermarket Group The eCommerce Almanac

6.03 U.S. Business-to-Business Internet Commerce by Sector: 1999 - 2003 (Billions $)

Sector 1999 2000 2001 2002 2003 Aerospace/Defense $5.6 $15.0 $29.2 $40.5 $58.9 % of total sector 3.0% 8.0% 15.0% 20.0% 28.0% Agriculture $16.6 $34.6 $54.2 $75.5 $98.5 % of total sector 2.0% 4.0% 6.0% 8.0% 10.0% Chemicals $22.0 $76.1 $126.0 $171.1 $253.0 % of total sector 1.5% 5.0% 8.0% 10.5% 15.0% Computer Hardware/Software $26.6 $54.0 $82.9 $119.1 $164.4 % of total sector 8.5% 15.0% 20.0% 25.0% 30.0% Construction and Real Estate $6.8 $8.4 $12.1 $16.3 $20.8 % of total sector 0.6% 0.7% 0.9% 1.2% 1.4% Consumer Prod. (intrabusiness) $2.2 $3.3 $5.1 $7.1 $9.3 % of total sector 0.3% 0.4% 0.5% 0.7% 0.9% Electronics (Non-Defense) $0.7 $1.1 $1.5 $2.2 $3.1 % of total sector 6.0% 8.5% 11.0% 15.5% 20.0% Energy (Oil/Gas/Mining) $15.0 $29.0 $48.1 $73.3 $101.5 % of total sector 2.5% 4.5% 7.0% 10.0% 13.0% Financial Services $2.4 $6.2 $18.6 $33.8 $50.4 % of total sector 0.5% 1.2% 3.4% 5.9% 8.4% Food/Beverage/Tobacco Mfg. $1.4 $6.2 $7.1 $8.2 $9.4 % of total sector 0.3% 1.1% 1.2% 1.3% 1.4% Gov’t. Spending to Businesses $0.8 $16.1 $28.8 $46.3 $68.3 % of total sector 0.0% 0.9% 1.6% 2.4% 3.4% Industrial Equipment $4.7 $12.1 $37.9 $66.3 $97.4 % of total sector 0.5% 1.3% 3.8% 6.3% 8.8% Information Services $3.8 $6.0 $12.6 $24.2 $36.9 % of total sector 1.0% 1.5% 3.0% 5.5% 8.0% Medical Equipment $0.6 $1.1 $4.0 $9.7 $16.3 % of total sector 0.6% 1.1% 3.6% 8.1% 12.6% Motor Vehicles and Parts $0.5 $6.6 $15.5 $24.9 $34.7 % of total sector 0.2% 2.7% 6.2% 9.7% 13.2% Paper and Office Products $0.7 $4.1 $14.5 $25.4 $37.1 % of total sector 0.2% 1.2% 3.9% 6.7% 9.4% Pharmaceutical $1.3 $5.4 $10.0 $14.9 $20.4 % of total sector 0.5% 2.0% 3.5% 5.0% 6.5% Transportation/Freight $3.2 $8.2 $13.5 $22.5 $32.1 % of total sector 1.0% 2.5% 4.0% 6.5% 9.0% Source: Goldman Sachs

Business-to-business Internet commerce activity in the U.S. is expected to total approximately $300 billion during 2000. During that period, Goldman Sachs predicts that Internet commerce will penetrate most deeply into the computer products, non- defense electronics, and aerospace/defense sectors, accounting for 15%, 8.5%, and 8% of sector-wide sales respectively. Sectors anticipated to be least affected by Internet commerce -- in terms of the share of total spending migrated online from existing channels -- are consumer products, construction and real estate, and government procurement. During 1999, an overall average 1.6% of U.S. business-to-business sales in the industry sectors tracked by Goldman Sachs were conducted through Internet commerce. The company expects that share to more than double to 3.4% during 2000 and rise to approximately 11% in 2003. In 2003, the computer products, aerospace/defense, and

non-defense electronics sectors are expected to still retain their status as the industry sectors with the largest penetration rate for Internet commerce, which by that time is predicted to account for 30%, 28% and 20% of total sector-wide sales respectively.

6.04 Value of Business-to-Business Internet Commerce Transactions (1999) Percent of B-to-B Internet commerce transactions

> $10,000 8% < $50 5% $51 - $100 $1,001 - 5% $10,000 41%

$101 - $500 36%

$501 - $1,000 5% Source: ActivMedia

The largest proportion of business-to-business Internet commerce transactions are valued between $1,001 and $10,000, according to ActivMedia, followed by transactions valued between $101 and $500 (36%). ActivMedia also estimates the mean transaction size during 1999 at $5,580 and the median transaction size at $800. Most companies are working aggressively to migrate their existing electronic commerce activity -- as well as many conventional, offline transactions -- to Net Markets and other IP-based platforms. The majority of electronic commerce activity during 1999 was still conducted through legacy EDI transactions, however, Boston Consulting Group predicts that almost three-fourths (71.9%) of such activity will be conducted through Internet-based transactions by 2003. Internet-based transactions accounted for only 13.7% of total e-commerce transactions as recently as 1998, according to the company.

6.05 How Electronic Commerce Transactions Are Conducted (1998 and 2003) Percent of all B-to-B electronic commerce transactions

1998 2003 ($671 bn total activity) ($2,780 bn total activity)

Internet-based Internet-based Transactions Transactions 71.9% 13.7%

EDI Transactions 86.3%

EDI Transactions 28.1%

Source: Boston Consulting Group Source: Boston Consulting Group

232 copyright  2000 by The Intermarket Group The eCommerce Almanac

7.0 Trends in Managing eCommerce Initiatives

7.01 Profit Expectations of Internet Commerce Companies Percent of companies in each category

Business-to-Consumer Sites Business-to-Business Sites Mixed Audience Sites

40% 32.8%

30% 29.3% 22.2% 22.1% 20.6% 20.2% 19.0%

20% 18.1% 16.0% 12.8% 12.7% 12.4% 11.7% 11.1% 11.1% 11.0%

% of e-commerce firms e-commerce of % 10% 4.3% 3.2% 2.7% 2.0% 1.6% 1.6% 1.0% 0.5% 0% Profitable 2000 2001 2002 2003 After 2003 Don't Don't Now Know Measure

Source: IDC

In late 1999, IDC surveyed “dot-com” executives at 651 firms on the profitability of their online operations and found that 27% were already earning a profit. Companies targeting a mixed audience of both businesses and consumers were the most likely to be profitable (32.8%) while those focused exclusively on the retail consumer were least likely to be profitable (22.2%). Almost 60% of the firms overall expect to earn a profit by year-end 2001. Approximately one-in-five (21%) do not specifically measure the profitability of their online operations but instead view them within the context of their overall business. Forrester Research estimates that “dot-com” companies spent approximately $1.7 billion on national advertising during 1999, or roughly double what they spent the previous year. Competitive Media Reporting (CMR) estimates that that Internet commerce companies alone spent approximately $3.17 billion on offline media -- in both local and national buys -- during 1999, up from $649 million in 1998 (see 7.02). Magazine and network television were the most popular offline media, accounting for almost one-half (43%) of all offline ad buys, according to CMR, and television advertising of all types -- network, cable, spot, and syndicated -- comprised more than one-half (51%) of all offline expenditures. The top five Internet commerce companies in terms of offline ad spending for 1999 were E*Trade Group ($124.2 million), Ameritrade ($103.7 million), Priceline.com ($49.6 million), eToys ($45 million), and Amazon.com ($35 million), according to CMR.

7.02 Offline Advertising by Internet Companies Millions of dollars

1998 1999

$687.27 Magazines $153.65

$667.56 Network TV $131.73

$486.51 Cable Network TV $95.67

$424.66 Spot TV $87.95

National $300.06 Newspapers $61.11

$295.75 National Spot Radio $47.29

$133.92 Newspapers $27.23

$72.90 Network Radio $26.87

$44.89 Outdoor $5.98

$36.13 Syndicated TV $7.87

$25.00 Sunday Magazines $3.99

$0 $100 $200 $300 $400 $500 $600 $700 $800

Total annual spending ($ '000,000s)

Source: Competitve Media Reporting

The cost of acquiring a new customer varies significantly among Internet commerce companies. A majority (51%) of firms surveyed by PriceWaterhouseCoopers invested $200.00 or more to acquire each new customer during 1999 while one-third invested $40.00 or less (see 7.04). Boston Consulting Group estimated that the average customer acquisition cost during the same period was $38.00 -- up 15% from the previous year -- among the 412 Internet commerce companies covered by its own survey. Most of the increase was driven by higher acquisition costs among pure-play online retailers, which paid an average $82.00 for each new customer, while the acquisition costs of multichannel retailers actually declined to an average $12.00. Financial firms and the online grocers generally invested the most for each new customer while book and music/video retailers generally invested the least. The average estimated customer acquisition cost for companies in each major market sector, according to Jupiter Communications, is between $200-$400 for online brokers, $150- $200 for online travel firms, $100-$200 for computer hardware retailers, $50-$100 for software retailers, $40-$50 for CD/DVD/Video retailers, $30-$100 for toy and game retailers, and $30-$70 for online booksellers.

234 copyright  2000 by The Intermarket Group The eCommerce Almanac

7.03 Estimated Customer Acquisition Cost (1999) Dollars per new customer*

Amazon.com $39 Ameritrade $138 $413 Ashford.com

autobytel.com $58 BarnesandNoble.com $33 Beyond.com $60 Bluefly $128 Bolt Inc. $7 Buy.com $42 CDnow $40 drugstore.com $88 E*TRADE $300

eBay $12 Egghead.com $72 eToys $78 FTD.com $19 Garden.com $38 HomeGrocer.com $154 iPrint.com $23 NetB@nk $152 NextCard $137

Outpost.com $152 $424 Peapod Pets.com $295 PETsMART.com $186 PlanetRx.com $217 Priceline.com $22 Charles Schwab $220 Travelocity.com $9 Webvan Group $250

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450

Source: SEC filings

*Estimated costs for Bolt Inc., eBay, Garden.com, iPrint.com, Priceline.com, and Travelocity.com are per registered user.

7.04 Estimated Customer Acquisition Cost (1999) Percent of Internet commerce companies

< $1.00 > $200.00 4% 51% $1.01-$10.00 12%

$10.01-$40.00 16%

$40.01-$80.00 $100.01- 8% $200.00 $80.01-$100.00 7% 2% Source: PriceWaterhouseCoopers

The average 1999 budget for website maintenance and operation, excluding hosting or ISP expenses, among a large cross-section of companies -- including many smaller enterprises -- was $36,579, according to ActivMedia. The company also found that business-to-consumer companies which employ the Internet as their exclusive sales channel spent an average of $67,853, or almost twice as much as the overall average. The largest proportion of sites -- 34% of all sites and 31% of online retailers -- spent between $1,001 and $5,000 on site maintenance and operation. The next most frequently mentioned budget range was $10,000 to $99,000, which applied to 22% of all sites and 27% of online retailers. Approximately 8% of all sites -- and 9% of online retailers -- spent between $100,000 and $1 million; only 1% of all sites and 3% of online retailers spent in excess of $1 million on site maintenance and operation during 1999. The median development and technology budget among large-scale Internet commerce companies tracked by The eCommerce Almanac was $8.5 million during 1999, up from $1.6 million the previous year; the average budgets for the same time periods were $17.0 million and $8.1 million respectively. These expenditures include not only website maintenance and operation but also spending related to the back-end systems development and integration which are unarguably key to remaining competitive in most sectors of Internet commerce. The average percentage of total revenue spent on development and technology declined to 50.4% in 1999 from 72.4% the previous year as the companies tracked have scaled rapidly -- average revenue growth among companies tracked by The eCommerce Almanac was 486% during 1999 -- but the median remained fairly level, dropping to 16.1% of total revenue during 1999 from 17.0% in 1998. The website features companies are most likely to implement during 2000, according to IDC, include personalization -- 39% plan to implement some type of personalization during the year -- community features (27%), comparative shopping or competitor pricing information (19%), and online auctions (15%). Approximately three times as many business-to-consumer sites have plans to add online auctions as business- to-business sites (21% vs. 7%) while community features figure slightly more prominently in the plans of business-to-business sites (26% vs. 21%). Approximately 29% of the Internet commerce companies surveyed by IDC plan to implement some type of services -- or dedicated sites -- for broadband users during 2000. Aggressive broadband strategies were more common among business-to-

236 copyright  2000 by The Intermarket Group The eCommerce Almanac

7.05 Technology and Development Expenditures as Share of Revenue (1998/1999) Thousands of dollars

FY 1998 FY 1999 Dev. & % of Dev. & % of Company Revenue Tech. (1) Revenue Revenue Tech. (1) Revenue Amazon.com, Inc. $609.8 $46.4 7.6% $1,640.0 $159.7 9.7% autobytel.com, Inc. 23.8 8.5 35.8% 40.3 14.3 35.4% autoweb.com inc. 13.0 0.6 4.5% 32.8 5.1 15.6% BarnesanNoble.com 61.8 8.5 13.8% 202.6 21.0 10.4% Beyond.com Corp. 36.7 4.1 11.3% 117.3 10.4 8.9% BUY.COM, Inc. 125.3 1.0 0.8% 596.9 7.8 1.3% CarsDirect.com Inc. 0 0 n/a 15.2 2.2 14.7% CDnow Inc. 56.4 8.0 14.2% 147.2 23.4 15.9% drugstore.com, inc. 0 2.2 n/a 34.8 14.9 42.8% eBay Inc. 86.1 4.6 5.3% 224.7 23.8 10.6% Egghead.com, Inc. 356.5 11.8 3.3% 514.8 15.5 3.0% E-LOAN Inc. 6.8 1.4 19.8% 22.1 3.6 16.3% eToys Inc. 30.0 3.6 12.1% 151.0 43.4 28.8% E*TRADE Group, Inc. 335.8 76.9 22.9% 621.4 78.5 12.6% Expedia, Inc. 13.8 18.5 133.8% 38.7 21.2 54.7% Fogdog Inc. 0.2 1.3 660.0% 7.0 3.5 49.4% FTD.com 30.7 1.4 4.6% 49.6 2.2 4.4% Furniture.com Inc. 3.7 1.1 29.3% 10.9 6.7 61.3% Garden.com, Inc. 1.3 1.2 92.3% 5.4 3.2 59.3% IMX Exchange 0.6 1.1 180.6% 0.3 1.7 545.5% InsWeb Corp. 4.3 10.1 233.9% 21.8 8.9 40.6% iOWN 1.3 4.8 365.7% 14.8 10.4 70.4% iPrint.com inc. 0.6 0.9 157.9% 3.3 3.5 108.6% NetB@nk 18.8 0.3 1.7% 56.4 1.4 2.5% NextCard, Inc. 1.2 0.5 41.7% 26.6 22.1 83.0% 1-800-Flowers, Inc. 26.8 1.8 6.7% 52.9 8.1 15.3% Outpost.com 22.7 1.1 4.7% 85.2 3.7 4.4% Peapod, Inc. 69.3 3.4 4.9% 73.1 3.5 4.8% Pets.com, Inc. 0 0 5.8 6.5 112.0% PETsMART.com Inc. 0 0 10.4 2.4 22.6% PlanetRx.com Inc. 0 0 9.0 13.0 144.1% Priceline.com Inc. 35.2 11.1 31.5% 482.4 14.0 2.9% Staples.com 16.9 0.9 5.6% 94.4 4.1 4.3% Travelocity.com Inc. 35.5 10.2 28.7% 90.9 12.1 13.3% Webvan Group Inc. 0 3.0 13.3 15.2 114.5% (1) Covers expensed items only; does not include amortization or capitalized equipment costs. Source: SEC filings

consumer sites, with 36% planning to do something within 12 months compared to 28% of business-to-business sites. IDC also found that almost one-in-four (22.3%) Internet commerce companies are planning to implement some type of services or support for wireless users and other non-PC devices during 2000; 7% of the companies surveyed already provide at least some type of support for non-PC users. Business-to-business sites were the least likely to have plans for new or additional investments in this area (only 16% of sites) while sites serving a mixed audience of both businesses and consumers were most likely (29%) and approximately 23% of business-to-consumer sites were planning to add some type of support for non-PC devices over the next 12 months. (See also “Wireless Internet Commerce,” August 2000, by Intermarket Group.)

8.0 Internet Commerce Executive Compensation

8.01 Executive Compensation At Leading Internet Commerce Firms (1999) Annual cash salary and bonus

Position Executive Salary Bonus Amazon.com Inc. CEO Jeffrey Bezos $ 81,840 $ 0 COO Joseph Galli, Jr. 1 102,266 2,900,000 CIO Richard Dalzell 201,512 206,212 CFO Warren Jenson2 55,679 2,150,000 Vice President and General Manager of Operations Jeffrey Wilke2 38,180 803,000

Ameritrade Holding Corp. Co-CEO J. Joe Ricketts 435,000 54,375 Co-CEO Thomas Lewis3 227,565 25,000 CFO Robert Slezak4 250,008 37,500 CEO - Ameritrade unit Jack McDonnell5 153,462 92,077

Ashford.com, Inc.6 CEO Kenneth Kurtzman 225,962 50,000 CIO James Whitcomb, Jr. 200,923 0 CFO David Gow 175,606 0 Vice President, Technology Jeffrey Helms 163,885 0

autobytel.com inc. CEO Mark Lorimer 323,958 156,000 COO Ann Delligatta 225,000 108,000 Sr. Vice President, Marketing Michael Lowell7 149,000 167,200 Sr. Vice President and CFO Hoshi Printer 165,593 138,800

Autoweb.com CEO Dean DeBaise 250,000 100,000 COO Samuel Hedgpeth III 166,875 36,000 CTO Gordan Kass8 156,479 0 Vice President, Marketing Michele Hickford 110,000 30,101 Vice President, Global Sales Robert Shapiro 128,333 66,154 Vice President, Sales David Greene 144,000 90,018

BarnesandNoble.com Inc. CEO Jonathan Bulkeley9 431,606 0 CTO Gary King 275,000 100,000 Sr. Vice President, Marketing & Sales Carl Rosendorf 300,000 100,000 Vice President, Operations William Duffy 292,040 112,880

BUY.COM, Inc. CEO Gregory Hawkins10 217,755 0 CFO Mitch Hill11 33,846 0 Vice President, Advertising & Marketing John Herr 184,462 10,000 Vice President, Sales Operations Brent Rusick 184,731 0 Vice President, Global Business Development Murray Williams 127,062 0

238 copyright  2000 by The Intermarket Group The eCommerce Almanac

Position Executive Salary Bonus CDnow Inc. CEO Jason Olim $ 193,077 $ 0 Sr. Vice President, Product Marketing & Management Rod Parker12 153,859 0 Vice President, Strategic Business Development Robert Salzman 152,489 0

drugstore.com, inc. CEO Peter Neupert 249,184 250,000 COO Kal Raman 174,171 36,954 CFO David Rostov 123,794 21,615 Vice President, Business Development Mark Silverman 171,564 60,083 Vice President, Marketing Suzan Del Bene13 135,092 6,879

eBay Inc. CEO Margaret Whitman 195,000 97,500 COO Brian Swette 160,000 56,000 President, eBay Technologies Maynard Webb14 184,327 108,000 Chief Scientist Michael Wilson 150,000 52,500

Egghead.com, Inc. CEO S. Jerrold Kaplan 100,000 0 COO Jeffrey Sheahan 255,705 50,000 CFO John Labbett 229,006 0 Sr. Vice President, Merchandise Acquisition Merle McIntosh 193,750 0 Sr. Vice President, Marketing Bari Abdul 142,167 0

800.com Inc.6 CEO Gregory Drew 112,500 0

E-LOAN Inc. CEO Chris Larsen 125,000 0 COO Joseph Kennedy15 160,000 0 CFO Frank Siskowsky 170,000 0 Sr. Vice President, Operations Harold Bonnikson 144,808 0 Vice President, Secondary Marketing Steven Magerus 135,000 28,700

eToys Inc.6 CEO Edward Lenk 105,000 0 CIO John Hnanicek 150,000 45,000 CFO Steven Schoch 125,500 20,833 Sr. Vice President, Marketing Janine Bousquette 132,553 75,000 Sr. Vice President, Operations Louis Zambello III 200,000 71,250

E*Trade Group Inc. CEO Christos Cotsakos 522,789 1,140,999 COO Kathy Levinson 357,404 562,934 Chief Media Officer Debra Chrapaty 260,288 260,098 Chief Marketing Officer Jerry Gramaglia 267,635 229,121 Chief International Officer Judy Balint 260,288 266,774

Position Executive Salary Bonus Expedia, Inc. CEO Richard Barton $ 119,072 $ 50,000 CFO Gregory Stanger 101,427 35,591 Vice President, Product Development Byron Bishop 128,231 49,000 Vice President, Sales Simon Breakwell 105,157 6,500 Vice President, Operations Seth Eisner 108,584 23,700

Fashionmall.com CEO Benjamin Narasin 180,000 40,000

FatBrain.com16 CEO Chris MacAskill 110,003 31,260 COO Dennis Capovilla 173,079 52,936 CFO Donald Alverez 140,789 28,785 Exec. Vice President, Product Development Kim Orumchian 133,079 40,784 Exec. Vice President, Operations Sean Cumbie 146,388 43,179

Fogdog Inc. CEO Timothy Harrington 170,000 50,000 President Timothy Joyce17 116,667 15,271 CFO Marcy von Lossberg18 115,000 17,986 Vice President, Engineering Robert Chea 110,000 17,204 Vice President, International Brett Allsop 135,000 17,952

FTD.com CEO Michael Soenen 153,846 0 CIO Frederick Johnson 235,039 0

Furniture.com Inc. CEO Andrew Brooks 212,885 0 Sr. Vice President, Product Carl Prindle 159,449 0 Development Vice President, Marketing Kirsten von Hassel19 132,693 2,500 Vice President, Sales Peter Halunen 75,000 60,000 Vice President, Merchandising Rose Mauriello20 108,174 35,000

Garden.com, Inc. CEO Clifford Sharples 113,670 n/a COO James O’Neill 113,670 n/a CTO Andrew Martin 143,000 n/a Chief Marketing Officer Lisa Sharples 113,670 n/a Vice President of Publishing Douglas Jimerson 102,870 n/a

HomeGrocer.com, Inc. CEO Mary Alice Taylor21 63,846 0 President J. Terrance Drayton 172,446 0 CIO Robert Duffy 124,788 38,438 Sr. Vice President, Marketing & Sales Jonathan Landers 182,150 56,209 Vice President, Storefront Ken Deering 131,388 41,137

240 copyright  2000 by The Intermarket Group The eCommerce Almanac

Position Executive Salary Bonus iOwn CEO Edward Hoyt $ 140,000 $ 0 COO Paul Holmes22 240,000 0 CFO Lee Kirkpatrick23 142,708 0 Vice President, Engineering Kevin Flood 135,625 0 Vice President, Customer Service & Operations Marcia Donner 112,019 78,750

InsWeb Corp. CEO Hussein Enan 196,750 31,125 President, Insurance Services Kevin Keegan24 182,916 27,548 COO Mark Guthrie 174,583 26,292 CFO Stephen Robertson25 170,416 25,709

iPrint.com, inc. CEO Royal Farros 100,001 0 CFO James McCormick26 34,091 11,364 Chief Marketing Officer Edward Sanden27 100,000 33,333 Vice President, Strategic Relationships Nickoletta Swank 108,333 0 Vice President, Technology David Hodson 130,000 0 Vice President, Operations Gregory Korjeff 108,333 0

KBkids.com LLC CEO Srikant Srinivasan28, 29 77,885 0 CFO Michael Wagner28 70,096 0 Vice President, Product Development Scott Wilder28 67,500 0 Vice President, Business Development Marty Smuin28, 30 25,962 0 Vice President, Merchandising David Novitsky28, 31 32,308 0

NetB@nk Inc. CEO D.R. Grimes 200,000 50,000 COO Donald Shapleigh, Jr.32 40,000 0 CFO Robert Bowers 150,000 0 CTO Thomas Cable 120,000 0

NextCard, Inc. CEO Jeremy Lent 262,500 325,000 CFO John Hashman 146,667 100,000 COO Timothy Coltrell 155,000 100,000 Chief Marketing Officer Daniel Springer 155,000 100,000

Outpost.com33 CEO Robert Bowman34 73,076 0 CFO and Exec. Vice President Katherine Vick 164,250 56,000 Business Development Chief Sales Officer Philip Rello 129,782 22,000 Chief Purchasing Officer Raymond Maccio 119,254 22,000 Chief Fulfillment Officer Bruce Schellinkhout 132,426 17,000

Position Executive Salary Bonus 1-800-FLOWERS, Inc.35 CEO James McCann $1,229,930 $ 0 Sr. Vice President Christopher McCann 216,667 36,000 Sr. Vice President, Finance & Administration John Smolak36 125,000 39,000

Peapod, Inc. CEO Andrew Parkinson 154,307 9,039 CTO Thomas Parkinson 146,903 9,039 CIO John Furton 138,981 6,402 CFO Dan Rabinowitz 134,096 4,860 Sr. Vice President, Marketing Michael Brennan 129,096 4,665

Pets.com, Inc. CEO Julia Wainwright 147,568 0 President Christopher Deyo37 134,009 0 CFO Paul Manca38 175,000 0 Vice President, Engineering Paul Melmon 111,009 0 Vice President, Marketing John Hommeyer 103,395 20,000 Vice President, Operations Diane Hourany 99,802 10,000 Vice President, Distribution & Logistics Ralph Lewis39 200,000 0

PETsMART.com, Inc. CEO Thomas McGovern 77,000 0 CTO Eric Kidd40 34,470 15,000

PlanetRx.com Inc. CEO William Razzouk41 160,000 160,000 CFO Steve Valenzuela42 129,583 0 CTO James Chong 175,000 100,000 Vice President, Merchandising Allan Goldman 150,000 0 Vice President, Distribution Services John McAlpin 130,000 0

Priceline.com Inc. CEO Richard Braddock 300,000 0 CFO Paul Francis43 225,000 0 CIO Ronald Rose 172,273 37,850 Exec. Vice Presdent, Travel Timothy Brier 250,000 0 Vice President, Finance Thomas D’Angelo 158,125 10,000

Rowe.com Inc. CEO Richard Rowe 253,000 0 CTO Walter Crosby 145,000 61,000 CFO Louis Hernandez, Jr.44 149,000 0 Vice President, Design & Development Ronald Grigg 93,000 34,000 Vice President, Content Steven Woit45 92,000 0 Vice President, Fulfillment Stephen Vozella 125,000 39,000

SportsLine.com, Inc. CEO Michael Levy 330,000 0 President, Sales & Marketing Mark Mariani 230,000 0

242 copyright  2000 by The Intermarket Group The eCommerce Almanac

Position Executive Salary Bonus SportsLine.com, Inc. (con’t.) President, Corp. & Business Development Andrew Sturner $220,000 $ 0 CFO Kenneth Sanders 270,000 0 Sr. Vice President, Operations Daniel Leichtenschlag 157,500 0

Travelocity.com Inc. CEO Terrell Jones 308,750 160,000 Exec. Vice President of Sales & Services James Marsicano 152,063 45,619

Value America Inc. CEO Glenda Dorchak46 266,020 442,500 CEO Thomas Morgan47 401,191 133,223 COO John Steele 159,005 70,231 CFO Dean Johnson48 227,914 58,013 Chief Marketing Officer Thomas Starnes 215,521 23,344 Exec. Vice President, Merchandising & Sales Paul Ewert 256,539 50,000

Webvan Group, Inc. CEO George Shaheen49, 50 134,000 (see note 50) CFO Robert Swan 69,000 450,000 Sr. Vice President, Operations Mark Zaleski 349,000 0 Vice President, Marketing Christian Mannella 218,000 0 Vice President, Distribution Gary Dahl 185,000 0

Source: SEC filings

Notes: 1. Hired June 1999; bonus amount was signing bonus 27. Hired May 1999 2. Hired July 1999; bonus amount was signing bonus 28. Salaries paid between inception in June 1999 3. Hired February 1999 through December 1999 4. Retired November 1999 29. Resigned May 2000 5. Hired March 1999 30. Hired November 1999; resigned March 2000 6. Fiscal year ending March 31, 2000 31. Hired September 1999 7. Left company in April 2000 32. Left company in April 1999 8. Hired February 1999 33. Fiscal year ending February 29, 2000 9. Left company in January 2000 34. Hired September 1999 10. Appointed CEO in March 1999 35. Fiscal year ending June 27, 2000 11. Appointed CFO in November 1999 36. Hired January 1999 12. Left company in July 1999 37. Appointed to position April 1999 13. Left company in October 1999 38. Hired August 1999 at annual salary of $175,000 14. Annual salary is $450,000 39. Hired November 1999 at annual salary of $200,000 15. Promoted from Sr. Vice President of Marketing & 40. Hired October 1999; bonus paid as signing bonus Business Development October 1999 41. Served as CEO until April 2000 16. Fiscal year ending January 31, 2000 42. Appointed CFO March 1999 17. Hired August 1999 at annual salary of $280,000 43. Left company March 2000 18. Left company in April 2000 44. Left company November 1999 19. Hired February 1999 at annual salary of $150,000 45. Left company September 1999 20. Hired March 1999 at annual salary of $125,000 46. Appointed CEO December 1999 21. Appointed CEO in September 1999 47. Appointed CEO March 1999; left company in 22. Left company in April 2000 December 1999 23. Hired October 1999 at annual salary of $240,000 48. Left company November 1999 24. Left company in January 2000 49. Hired September 1999 25. Left company in March 2000 50. Received signing bonus equal to purchase price of 26. Hired October 1999 1.25 million Webvan shares or $13,487,500

8.02 Compensation of Internet Management and Operations Personnel (2000)

Top 25% Earn Position Average More Than Executive Management (CEO, CTO, V.P. & Director) $85,506 $112,501 Programmer/Developer (back-end systems) $66,081 $74,501 Programmer/Developer (software) $64,024 $77,501 Programmer/Developer (Internet/intranet) $63,627 $74,751 Online Services Management $59,781 $73,126 Sales/Business Development $57,873 $72,501 Content Development $52,260 $62,501 System Administration $51,887 $63,501 Design/Layout $45,856 $55,751 Media Production $42,455 $47,501 Customer Service/Community $36,422 $50,601 Technical Recruiter $43,786 $57,501 Source: Association of Internet Professionals

Individuals in technical positions generally receive the highest compensation at Internet companies after those in executive positions, according to a survey by the Association of Internet Professionals (AIP). Programmers and developers involved with back-end systems are the most highly compensated, earning an average $66,081 in total compensation and the top 25% earning more than $74,501; software developers earned an average $64,024 and the top 25% earned more than $77,501. Medical and dental insurance are the most popular fringe benefits, offered by approximately 90% and 80% of employers respectively. Executive management are the most likely to receive profit sharing or bonuses (64%) and stock options (45%) but the least likely to receive 401(k) benefits, according to the AIP. Despite the tight market for technical talent, individuals involved with software and systems development are the least likely to receive stock options (31%).

8.03 Fringe Benefits of Internet Management and Operations Personnel (2000) Percent of employers providing partial or fully paid

Content development & online services management

Software/Systems development & administration

Senior Management (CEO, CTO, etc.), V.P. & director

100% 92.5% 90.0% 89.2% 84.3% 77.6% 77.0% 80% 76.0% 72.0% 72.3% 68.4% 65.2% 64.0% 60.0% 60% 59.5% 52.6% 45.0% 40% 32.6% 30.8%

20%

0% Medical Dental Profit Sharing 401 (k) Continuing Stock Options Insurance Insurance or Bonuses Education

Source: Association of Internet Professionals

244 copyright  2000 by The Intermarket Group The eCommerce Almanac

9.0 Online Advertising Overview

9.01 Total Online Advertising Expenditures (1/96 - 12/99) Millions of dollars and percent change quarter-to-quarter

Online Ad Expenditures Qtr. Over Qtr. Growth

2,500 80%

2,000 60% 1,777 llions)

1,500

1,217 40%

1,000 934 692 656 20% Qtr. Over Qtr. Grow th (%) 491 Online Ad Expenditures Online (mi

500 423 351 336 227 214 130 110 76 52 30 0 0% Q1-1996 Q2-1996 Q3-1996 Q4-1996 Q1-1997 Q2-1997 Q3-1997 Q4-1997 Q1-1998 Q2-1998 Q3-1998 Q4-1998 Q1-1999 Q2-1999 Q3-1999 Q4-1999

Source: IAB

Online ad spending during 1999 totaled $4.7 billion in the U.S., according to the Internet Advertising Bureau (IAB), an increase of 144% over 1998. Jupiter Communications’ online ad spending estimates for 1999 were $3.5 billion for the U.S. and $4.3 billion worldwide. Total U.S. spending for 2000 is predicted to reach $5.3 billion, according to both Forrester Research and the IAB. Jupiter’s forecasts are slightly higher at $5.4 billion for the U.S. and $7.0 billion worldwide. Spending on online advertising is expected to account for approximately 2.3% of aggregate U.S. advertising expenditures during 2000, according to all three firms.

9.02 U.S. Online Advertising Expenditure Growth (1998-2003) Billions of dollars

$12.2 12 $9.8

9 $7.4

6 $5.4

$3.5 3 $2.1

0 1998 1999 2000 2001 2002 2003

Source: Jupiter Communications copyright  2000 by The Intermarket Group 245 The eCommerce Almanac

9.03 Reach of Leading Ad Networks (May 2000) Millions of unique users during May and percent reach

Internet Users (millions) Reach (% of all Internet users)

15 15% 13.0%

10 10% 10.4

6.0% 5.5% 4.6% (%)Reach 5 5%

Internet UsersInternet (millions) 4.8 4.4 3.7 1.1% 0.9% 0.8%

0 0.87 0.73 0.64 0% AdForce avenue a avenue ValueClick DoubleClick LinkExchange

Engage/Flycast Source: PC Data Advertising.com

The number of web properties accepting advertising essentially kept pace with total online advertising expenditures during 1999, according to AdKnowledge. The company estimates that such sites expanded from 1,430 to 3,347 -- a 135% increase -- between December 1998 and December 1999. The cost of online advertising generally declined during 1999 as the number of web properties competing for advertiser dollars more than doubled. The average cost-per- thousand (CPM) declined steadily from $34.96 during the first quarter of 1999 to

9.04 Web Properties Accepting Advertising (12/97-3/00) Total number at end of period

4,500 4,070

3,347 3,500

2,560

2,500 2,111 1,815 1,430 1,500 1,175 1,264 1,033 1,139

500 Dec-97 Mar-98 Jun-98 Sep-98 Dec-98 Mar-99 Jun-99 Sep-99 Dec-99 Mar-00

Source: AdKnow ledge

246 copyright  2000 by The Intermarket Group The eCommerce Almanac

9.05 Cost of Online Advertising (12/97-3/00) Average cost per thousand pageviews in dollars

$40

$37.78 $38 $37.20

$36.29 $36.63 $36 $34.96 $35.13 $33.96 $33.59 $34 $34.23 $33.75

$32 Dec-97 Mar-98 Jun-98 Sep-98 Dec-98 Mar-99 Jun-99 Sep-99 Dec-99 Mar-00

Source: AdKnow ledge

$33.75 in the fourth quarter, according to AdKnowledge. A majority of the online advertising sold continues to consist of banner and tile ads, according to the IAB. E- mail advertising is the fastest-growing category, more than doubling its share of total online ad spending during 1999; despite the rapid growth, e-mail still accounts for only 2% of total spending.

9.06 Online Advertising Categories (1999) Percent of all online advertising expenditures

Sponsorships 27%

Interstitals 4%

Others Banner & Tile 11% Ads 56% e-mail 2%

Source: IAB

9.07 How Online Ads Are Priced (1999) Percent of all online advertising expenditures

CPM Ads 40%

Performance- based Ads 7% "Hybrid" Ads 53%

Source: IAB

The pricing model for online advertising during 1999 was essentially unchanged from 1998, according to the IAB, with a majority (53%) of expenditures based on some combination of cost per thousand and performance-based charges such as per-click or per-lead. Only 7% of advertising was sold with entirely performance-based pricing during 1999 and the remaining 40% was priced entirely on a conventional cost per thousand basis. As the Internet becomes more mainstream and the typical user is less technically oriented, the nature composition of online advertising is changing. Computer-related advertising continued its decline in market share, from 20% of total expenditures in the fourth quarter of 1998 to 16% one year later, while consumer advertising increased from 29% to 31% during the same period. Spending by new media advertisers showed the biggest change among the various sectors during 1999, increasing from 7% to 15% of total expenditures.

9.08 Online Ad Spending By Market Sector (1999) Percent of all online advertising expenditures

Q4-1998 Q4-1999 40%

31% 29% 30% 25%

20% 19% 20% 16% 17% 17% 12%

10% 7% 7%

n/a 0% Computing Consumer Financial New Media Business All Others Related Services Services

Source: IAB

248 copyright  2000 by The Intermarket Group The eCommerce Almanac

9.09 Ad Banner Click-Through Rate (1999-2000) Percent of banners clicked per user per week

2.0

1.5

1.0

0.5

0.0 8/2 - 8/8 - 8/2 6/28 - 7/4 - 6/28 9/12 - 9/6 3/7 - 2/28 4/11 - 4/5 6/4 - 5/29 1/24 - 1/30 - 1/24 5/16 - 5/10 6/20 - 6/14 7/25 - 7/19 8/29 - 8/23 10/2 - 9/27 11/7 - 11/1 1/16 - 1/10 2/20 - 2/14 3/26 - 3/20 4/30 - 4/24 12/6 - 12/12 - 12/6 10/11 - 10/17 - 10/11 11/21 - 11/15 12/26 - 12/20 Source: Nielsen/NetRatings

Click-through rates for online banner ads continued to decline during 1999, from an average 0.71% in January to 0.31% in December, according to Nielsen/NetRatings, and fluctuating between a high of 0.79% and a low of 0.27%. The average click-through rate during the first five months of 2000 was fairly steady at an average 0.29% versus an average 0.49% for calendar 1999. Total U.S. advertising expenditures across all media during 1999 were approximately $189 billion, according to McCann Erikson. The largest advertising categories were newspapers ($46.6 billion), direct mail ($41.6 billion), and broadcast television ($41.0 billion). Online advertising during the same period ranked between outdoor advertising ($1.1 billion) and business newspapers ($4.4 billion), accounting for approximately 1.8% of total advertising expenditures during 1999. Forrester Research and Jupiter Communications both expect online advertising to increase its share to approximately 2.3% of total advertising expenditures during 2000.

9.10 Total Offline Advertising Expenditures by Category (1999) Billions of dollars

Newspapers $46.6

Direct Mail $41.6

Broadcast TV $41.0

Radio $16.9

Yellow Pages $12.7

Magazines $11.1

Cable TV $9.8

Business Papers $4.4

Outdoor $1.7

$0 $10 $20 $30 $40 $50 $60

Source: McCann Erikson PriceWaterhouseCoopers copyright  2000 by The Intermarket Group 249 The eCommerce Almanac

Notes

250 copyright  2000 by The Intermarket Group The eCommerce Almanac

Notes