Tuesday September 28, 10:42 pm Eastern Time
E-commerce giants say looking beyond web ads
SHANGHAI, Sept 29 (Reuters) - The Internet is forcing fundamental changes in the world's biggest companies, but four that have embraced the new medium said on Tuesday their online advertising was limited.
David Pottruck, co-chief executive of Charles Schwab Corp (NYSE:SCH - news), the world's largest on-line brokerage, said he has pulled back on website advertising.
``I happen to be someone who's actually fairly negative on online advertising,' he said at the Fortune Global Forum, a gathering of world business leaders.
``I think most online advertising tends to commoditise you to be equal to the other commodity sellers who advertise online,' he said. ``We have no desire to be another button on somebody's website or a banner that clicks on annoyingly that no one really notices.'
Schwab now handles about two-thirds of its trades through the Internet, allowing the company to bring down the cost of transactions and shift more of its staff to building relationships with customers.
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DELL LOOKS BEYOND INTERNET TO REEL IN CUSTOMERS
Dell Computer Corp (NasdaqNM:DELL - news) the largest direct seller of personal computers, has prospered immensely from orders that pour in directly through its website, but chairman Michael Dell said the company looks beyond the Internet to reel in customers.
``The vast majority of our reach for new customers comes from the offline world,' Dell told the business forum.
Rather than try to build its brand by putting ads on thousands of websites, Dell can more effectively influence consumers once they visit the Dell website, he said.
``You can do a lot of things in great detail,' he said.
Ford Motor Co (NYSE:F - news) is hoping to adapt some of Dell's demand-driven direct sales model with the CarPoint venture with Microsoft Corp (NasdaqNM:MSFT - news).
Through CarPoint, buyers will be able to customise vehicle features and place orders online. Ford chief executive Jacques Nasser said he hopes to see a major portion of the automaker's sales driven by such orders.
``What we're describing is really an online production system where consumers are driving it, where the value chain becomes more and more efficient and where mass customisation becomes a reality and a possibility.'
CONSUMER DATA TO BE AVAILABLE SOONER
But building the Ford brands will still come down to conceiving and executing the right vehicles that the consumer wants, he said. The web initiative can help that by giving Ford faster information on customer tastes and lifestyles.
BT Worldwide chief executive Alfred Mockett said British Telecommunications Plc's (quote from Yahoo! UK & Ireland: BT.L) main web marketing initiative was its own website, where customers can access features such as online bill payment and directory searches.
China's development of electronic commerce can help it to leapfrog many outdated technologies and retail business models in developed countries, the panelists said.
Nasser said China's car market will one day rival the United States' annual sales of 15 million vehicles, but it needs only a fraction of the 23,000 U.S. dealerships.
At an earlier news briefing on Tuesday, Yahoo! Inc (NasdaqNM:YHOO - news) founder Jerry Yang said the company's business model in China may depend less on portal advertising and more on electronic commerce between businesses.
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