Columbia House merges with CDNow

Sony Corp. and Time Warner Inc. said they will merge their Columbia House music club with on-line music retailer CDNow Inc., creating a major Internet-based seller of music and entertainment content.

Under the deal, the partners will create a new company that combines Columbia House’s music and video direct sales businesses with CDNow’s on-line operations. Equally owned by Sony and Time Warner, Columbia House is a music club that sells exclusively to its 16 million active members.

Sony and Time Warner will each take 37 per cent of the new company. CDNow’s existing shareholders will hold the remaining 26 per cent. The partners expect to complete the merger, which is subject to shareholder approval, by the end of the year.

Yahoo’s Auctions fastest

In a recent test by Service Metrics, which evaluates Web site performance, Yahoo Auctions came out the fastest draw in a survey of eight major auction sites.

Measuring the speed at which shoppers could access the sites at various times of the day and week from around the country, Service Metrics found that Yahoo Inc.’s pages took an average of 1.91 seconds to download, nearly 9 seconds faster than the slowest of the bunch. The pokiest was First Auction, which downloaded pages at 10.50 seconds. E-Bay Inc. clocked in at 3.61 seconds, and Inc. trailed in at 7.19 seconds.

Service Metrics watched auction sites for three months around the clock, using data collection agents around the country running standard Netscape or Internet Explorer browsers and a T1 connection. The company measured the time it took to access home pages. Speed was influenced by the level of graphics and ads hosted on a site, as well as the general Internet traffic at different times of the day.

U.S. generates most e-commerce dollars

Worldwide e-commerce revenue will grow from US$98.4 billion in 1999 to $1.2 trillion by 2003, with the U.S. continuing to generate a majority of e-commerce dollars, according to a report from New York-based eMarketer.

Transactions in the U.S. reached $29 billion last year. This number is expected to grow to $98.4 billion this year and to $1.2 trillion next year.

After the U.S., Germany had the second-highest level of e-commerce revenue with $1.5 billion last year. Germany’s projected e-commerce revenue for this year is $4.4 billion.

EMarketer predicts that countries which are now on the brink of hitting the critical mass of Internet users required to see significant growth in e-commerce include France, Sweden, Netherlands, Australia and Italy.

E-commerce sites costly

The average cost of developing and launching an enterprise Web electronic commerce site is US$1 million, market research company Gartner Group Inc. has concluded in a research study.

The report, “Survey Results: The Real Cost of E-Commerce Sites,” estimates that 79 per cent of the total development cost is labor-related, while 10 per cent is spent on software and 11 per cent on hardware. The report also says that the cost will rise by 25 per cent annually.

According to the report, the average time to complete an e-commerce site was five months, although some took up to a year to launch on the Web. The goal for some enterprises was to create a Web e-commerce presence quickly and inexpensively, while others built Web sites that create market differentiation.

Internet businesses launch lobby group

Nine leading Internet-based companies in the U.S. have formed a new lobbying group with the avowed mission of becoming a “collective public policy voice” for Web businesses, engaging politicians on questions related to e-commerce and other on-line issues, according to a mission statement.

The companies, which include Inc. and America Online Inc. (AOL), said that this is the first public-policy group composed of participants whose primary businesses are based on the Internet. The group will attempt to foster user confidence in the Internet, while preserving “market-driven policies,” according to the group’s statement.

The other members are: DoubleClick Inc., eBay Inc., Excite@Home Inc., Inktomi Corp., Lycos Inc., Inc. and Yahoo! Inc.

Web site manages expenses

Starting in July, American customers will be able to log onto a Web site that manages their financial obligations for them.

For a monthly fee of US$9.95 will make as many as take care of 15 bill payments each month. The service will also handle more for an additional 50 cents per payment.

On the date the bills are due (or on other pre-arranged dates) automatically transfers funds from its customers’ bank accounts directly to the payees. For companies that don’t accept electronic funds transfers, the service will also send out traditional paper cheeses in a timely manner.