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Virtual Vineyards pushes World Wide Wine

Instead of pursuing a long-planned foray into electronic commerce software, Virtual Vineyards expands its merchant business.

Scared off by big players getting into Web storefront software, Virtual Vineyards is expanding its merchant business instead of pursuing a long-planned foray into electronic commerce software.

"We concluded that it was going to be a terrific dogfight in the software and technology space," Robert Olson, Virtual Vineyard's cofounder and technology guru told CNET, citing recent electronic storefront initiatives from Microsoft, Softbank, and Oracle.

"Our marketing budget is probably the amount they spend on breakfast. It didn't look like sort of space we wanted to compete in at this time," Olson added. That is a major shift for the company, which originally opened its Internet wineshop as a demonstration site for its back-end software for electronic stores.

Bolstered by the addition of veteran technology executive Kenneth Grunzweig as chairman, Virtual Vineyard tomorrow will launch a new gift catalog service, just in time for the holiday buying season. The move is part of its effort to become the leading online specialty retailer.

The company, among the first to sell consumer goods over the Internet, is beefing up its food lines and adding cookware, tabletop flatware, gift baskets, and "lifestyle-oriented accessories" to its core wine offerings. "It comes from a generic Wine Country lifestyle feel, but we're making it a worldwide wine country," Olson said.

Grunzweig joins Virtual Vineyards after a two-year stint as president and CEO of TravelNet. He served as chief marketing officer of software publisher Aldus and in several positions at Lotus Development.