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Tech Industry

Microsoft plans software store

The software giant is developing an online store that will let resellers sell and consumers buy its products on the Net.

Microsoft (MSFT) is developing an online software store that will let consumers buy its software on the Net, promoted by "buy now" buttons scattered through its Web site.

But the software giant says the store, due to launch in August, will primarily direct buyers to resellers, some of which are likely to charge lower prices. Microsoft also will make the software to run its store available for free to any Net stores running on the latest version of the company's e-commerce software.

"It will be the best reseller referral tool on the Internet," said Neil Farnsworth, general manager of business development for Microsoft's end- user customer unit.

The new program--called NITRO, for New Interactive Technology for Reselling Online--will be successor to a prototype store called ByteComp.com that Microsoft launched in November. That site, which does not handle transactions, showcases software code and components for a "store of the future." It also includes tips to help online resellers use those components in their own stores.

"Basically it's a store that has tentacles that go out into the rest of Microsoft.com," added Farnsworth, noting that the site gets 1.2 million to 1.5 million visitors a day. "We're trying to convert those visitors into buyers." The "buy now" buttons will begin to appear in April or soon thereafter, according to Farnsworth.

The program is oriented at consumers, not small businesses or large corporate customers that generally license the software instead of buying it in a shrink-wrapped box. But Microsoft is planning a comparable "licensing store" in the future.

Once the NITRO store is launched, visitors who click on a "buy now" button will be offered chances to buy other Microsoft software. Farnsworth said The company will sell the software to visitors if they insist--at 10 to 20 percent more than street prices.

"Microsoft uses resellers because they provide more value than Microsoft can provide, and often that includes a lower price," he added.

But the system will let Microsoft collect a lot of data about potential buyers--information that could be used in Microsoft marketing efforts. Some resellers fear that in the future Microsoft, armed with buyer data, might try to cut them out of distribution chain.

In its NITRO program, Microsoft will charge a small transaction fee, perhaps under $1, for each order it refers to a reseller.

The storefront software and referral program for resellers will only be available on the latest version of Microsoft's e-commerce package, Site Server 3.0, Commerce Edition. But Farnsworth said some resellers that use other software have expressed interest in the program even though they'll have to build a link to the Windows NT-based Microsoft system.