E-Commerce Foundations

1. Internal web groups struggle to learn what they need to learn while fending off the competition. Companies with large catalog operations, like REI.com and sharperimage.com, have managed to hire good people and capture market share. But most companies haven't been able to capitalize on the e-commerce opportunity simply by putting up a catalog and buying banners ads.

2. An autonomous online division or subsidiary is the best way for stablished companies to engage in e-commerce. Companies like Office Depot, Barnes & Noble, and Charles Schwab have manage to do quite well with this approach. Their goal should be to become number one in their respective categories without regard to whether they are hurting the offline bussiness.

3. A pure play is a company whose sole income comes from its website. Pure plays - like Golf.com, Listen.com, Yucky.com and Webcan.com - are lean, mean e-commerce machines. They are usually venture-backed, web savvy, and very aggresive. In e-commerce, a pure play has a huge advantages: It doesn't have to charge sales tax and doesn't have any average or bad sales-people dragging down profits.

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