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From...
Industry Standard

New Microsoft store is hardly house of bargains

March 13, 1999
Web posted at: 12:33 p.m. EST (1733 GMT)

by Alex Lash microsoft

(IDG) -- With little fanfare, Microsoft has opened an online retail store to sell its own software, hardware and how-to books. The low-key approach makes sense: The site raises serious questions about how to sell direct over the Web without misleading customers and alienating resellers.

Theoretically, the four resellers working with Microsoft on the site - CDW, CompUSA, Insight and Beyond.com - will get lots of new customers. But it may not work out that way. After shoppers endure a long ordering process on the site, they come to a page that gives them five choices of where to buy - the four resellers and Microsoft itself. Each gets a similar-size logo.

Why have a direct link at all? "Some customers want it," says Shop Microsoft's Bill Hammer.

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Resellers privately wonder why Microsoft doesn't try harder to steer buyers their way. In fact, fine-print language on the site could sway a nervous buyer toward Microsoft: "Microsoft Direct allows you to place your order directly with Microsoft's online store; however, you may leave the Microsoft site to place orders at our resellers' Web sites. Links to reseller sites are provided as a convenience - Microsoft is not responsible for these sites."

Moreover, customers aren't informed that buying direct from Microsoft is often the most expensive choice. The only way a cost-conscious shopper can compare pricing is by navigating back and forth between the online stores through a maze of error messages and page-reload commands.

Privacy is also a concern. At one point in the buying process, users can check a box to decline e-mail and phone calls from Microsoft and its partners. Leaving the boxes unchecked - which shoppers could easily do as they quickly click through the multiple-screen purchasing process - is considered an acceptance of solicitation.

Microsoft officials offer explanations. There's no price chart, they say, because the resellers change prices daily and gathering the data is too difficult. The higher prices for direct sales, they add, are meant to minimize competition with the resellers. As for the e-mail opt-out process, Hammer says the company "just adopted what's been used on the rest of the Microsoft Web site."

Publicly, the resellers say the site has brought good business. During the beta trials that started in November, Insight sales from Shop Microsoft doubled in dollar value month after month, and have now reached five digits, says an Insight spokeswoman.

Meanwhile a revamped site is already slated for this summer. Hammer says the new version will offer resellers "more marketing control."

While Microsoft has tried to fashion itself into a user-friendly e-commerce player, Shop Microsoft feels more like a textbook example of the old Redmond: Get the first version out, fix the bugs later.

Where do you want to shop today?

Microsoft's Web store let's you buy direct, or use a reseller. Guess who has the highest prices?

COMPANY ENCARTA AFRICANA OFFICE 97 PROFESSIONAL MICROSOFT NATURAL KEYBOARD ELITE
Insight

$55.99

$528.99

$49.99

Beyond.com

$57.95

$533.00

$52.95

CDW

$62.31

$523.95

$55.49

CompUSA

$69.95

$527.95

$37.45

Microsoft Direct

$81.31

$655.34

$75.89


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Microsoft Corp.
CompUSA Inc.

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