Net commerce sales boom

Companies betting their futures on selling over the Internet saw sales jump more than 31 percent in their last quarters, according to recent quarterly earnings reports.

In addition, anecdotal evidence from firms that sell both on the Net and in the physical world suggest that the online businesses of those companies are booming as well. Most companies that sell online and through real-world outlets do not report Internet revenues separately.

"People are selling stuff all over the place," said David Locke, an analyst with brokerage house Volpe Brown Whelan. "All the indications are that most companies had blow-out quarters...especially from a transactions perspective."

CUC International (CU), a huge direct marketer of consumer goods and services, is averaging $100 million a month in Internet revenues--before the busy Christmas selling season. That figure, which amounts to $1.2 billion a year, was confirmed by CUC after Wired magazine reported it earlier this month.

Quarterly Web Sales
Company (Ticker)	Before 9/30/97 (millions)	Before 6/30/97 (millions)	Percent Gain
Insight (NSIT)	$6.8	$5.5	23
Onsale (ONSL)	$32.3	$24.5	32
Amazon.com (AMZN)	$37.9	$27.9	35
E*Trade* (EGRP)	$48.5	$37	31
* 60 percent of E*Trade revenues come from Internet transactions.

That puts consumer-oriented CUC ahead of Dell Computer (DELL), which says it is selling $3 million a day in PCs, primarily to the business market. Dell's Internet sales have grown from $1 million a day in March to $3 million a day as of last month.

Cisco (CSCO), the networking equipment giant, remains the Net's busiest seller, and expects to sell $2 billion over the Net this year.

The clearest evidence of sales on the Net comes from three "pure-play" Internet companies that sell only on the Net and are traded on public stock exchanges: bookseller Amazon.com (AMZN), online auction house Onsale (ONSL), and online brokerage E*Trade (EGRP).?

For the pure-play companies, Internet revenues, which they are required to report publicly, increased 31 to 35 percent in July, August, and September compared with the previous three months, according to their earnings reports for the quarter ended September 30.

Amazon.com experienced the biggest jump: Revenues grew 35 percent, from $27.9 million for the quarter ending June 30 to $37.9 million for the three months ending September 30. Onsale, which primarily sells computer equipment and software from its auction site, saw revenues increase 32 percent, to $32.5 million up from $24.5 million in April, May, and June.

E*Trade's revenues jumped 31 percent, from $37 million to $48.5 million in consecutive quarters. The Internet accounts for about 60 percent of E*Trade's revenue (the rest comes from other online media or via touch-tone phones), but Net trades are growing even faster than the company's overall revenue.

Those increases came over the summer, often a slower period for many industries, particularly retail.

Direct marketer Insight (NSIT) reported that its Internet revenues grew from $5.5 million to $6.8 million over the same period, a 23 percent increase. Insight's real-world revenues grew at the same percentage, and the company said about 4 percent of its revenues come from the Net.

Locke mentions others whose Internet sales are booming: Peapod (PPOD), which sells groceries online and by phone, and Surplus Direct, recently acquired by Egghead Software (EGGS).