Behind The Internet Bargains

They're going for broke to get you to buy on line, says CBS News Reporter Peter King.

Erik Gordon, director of the University of Florida Center for Retailing told CBS Radio News that, like sports teams, the dot-coms want to rack up points-dollars-at all costs-to beat traditional retailers.

"One team has to play basketball using the basketball rules. For the other team, there are no rules," said Gordon. "You can go out of bounds if you want to, you can put two guys on each others' shoulders. All you have to do is score baskets, any way you want to."

That means spending money like there's no tomorrow on promotion, offering deep discounts, and free shipping.

He pointed out the larger dot-coms have outspent and outsold smaller competitors, but are losing money. Still, those are the ones most likely to be around next year.

Gordon said most of the dot-coms are financed by venture capitalists, who, for now, are happy for high sales at any cost. Next year, though, he says, they'll want profits, which may mean fewer discounts - and fewer online perks for you.
  • CBSNews.com staff CBSNews.com staff

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