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To: BGR who wrote (25444)	4/12/2000 11:30:00 PM
From: Boplicity	Read Replies (2) \| Respond to of 42523

Report: Most Web Retailers Will Go Bust Soon Largest and Best-Known Sites, Such As Amazon.com, Are Outpacing the Pack By RACHEL BECK .c The Associated Press NEW YORK (April 12) - Most retailers that operate entirely on the Internet will be out of business by next year, a respected consulting firm predicted in a harsh report that fired another blow to the battered online shopping industry. Intense competition combined with an ongoing selloff in dot-com stocks will result in a rapid rise in buyouts and bankruptcies in the coming months, according to Forrester Research Inc. The fallout has already begun. Lawyers and consultants are getting swamped with calls for help from companies in distress. 'There are just too many companies out there that don't have what it takes to last, and they won't last,' said Seema Williams, an analyst at Cambridge, Mass.-based Forrester. When Internet shopping first began to gain momentum a few years ago, many believed cyberspace would be big enough for anyone to do business, whether you were Wal-Mart or an entrepreneur selling jelly out of your kitchen. While the online world remains vast in size, the marketplace has gotten too crowded. There are too many sites - selling everything from pet supplies to toys to books to software - with similar products and content. It is quickly becoming clear that the largest and best-known sites - including Amazon.com - are outpacing the pack in terms of growth in customers and sales, and the smaller players have little chance to get noticed. There are also new threats from traditional chains, such as Wal-Mart and Sears, that are stepping up their online presence with reputable and very recognizable brand names. 'There are 30,000 e-tailers out there, and probably 25,000 will have to go away,' said Mark Doll, a consultant for startup companies at Ernst & Young. 'But that will end up helping the biggest and best players who can ride the tide and then will fare better because they'll have less competition in their markets.' The shakeout among the online retailers has started taking place, and this is just the start of what could be a bloodbath over the next year. In its report released late Tuesday that was based on surveys of 50 leading online retailers, Forrester said that most companies won't be able to cope in the coming months as competition intensifies and money evaporates just as merchants need to ramp up marketing for the Christmas season. There is no doubt that investors have tightened their purse strings. The flood of money from venture capitalists and initial public offerings of stock has dried up, and dot-com shares have been on a downward spiral. 'They don't have the funds available to them 12 to 18 months ago, and now they are trying to decide what to do to stay alive,' said Ming Tsai, senior vice president at Mainspring Inc., an Internet strategic consulting firm in Cambridge, Mass. 'Some will be forced to go out of business completely. Others will merge or be bought up by someone who sees something worthwhile in their assets ... like the technology that runs its site.' Already, some cybershops have bottomed out. A few merchants, including cooking site Cook Express, filed for bankruptcy, while dozens of others, such as CDNow and Peapod, are quickly running out of money. Some, including Cybershop and Beyond.com, got out of retailing entirely and now cater to businesses. Forrester said others are close behind, especially second-tier sites that are overshadowed by their larger rivals. Gloss.com, for instance, has been fighting for attention in the crowded online beauty space. On Wednesday, it was bought by Estee Lauder Cos. as part of the cosmetics giant's efforts to step up its online presence. Realizing that their future is in question, some e-retailers are trying to figure out what their next step should be. Law firm Luce, Forward, Hamilton & Scripps gets 10 to 15 calls a week, up from one or two just three months ago, from troubled Web retailers as well as vendors, venture capital firms and lenders who want to be represented if these businesses crumble. Keen Consultants, which helps companies restructure and sell assets, recently helped facilitate the sale of Beautyscene.com to an undisclosed buyer. It now is getting lots of calls from other ailing cybershops. Forrester may benefit too. It helped many cybershops plan their online businesses. Now they need help with repairs.