Online Tax Bills Advance in California

Is taxing Internet sales next?
By Bill Bergstrom
THE ASSOCIATED PRESS

PHILADELPHIA ? Pennsylvania could boost its budget more than $125 million a year by collecting sales taxes when residents go shopping online, say backers of a multistate effort to tax sales on the Internet the same as in stores. < more - The Pittsburgh Tribune-Review >

Macromedia - DevNet : What is Macromedia Central? Macromedia Central is a brand new way to develop, sell, and deploy applications using Macromedia Flash MX. More precisely, it is a different and exciting response to the need for “occasionally-connected” desktop and mobile applications.

E-TAILING SEES BIG DROP
But while traffic at news sites surge, top retail sites saw a fairly significant drop in audience numbers last week, with travel sites losing
the most potential customers.

Overall traffic to leading retail sites fell 8 percent on average last week over the prior four weeks, according to latest figures from ComScore. Travel sites were hit hardest. Expedia (EXPE) saw traffic plunge 22 percent. Orbitz.com saw traffic drop 12 percent. Travelocity's traffic plunged 17 percent.

Retailers also lost potential customers last week as consumers spent more time on news sites and other extraneous sites with information on the war.

WEB'S FUTURE REVENUE IN ADS, NOT SUBS
Consumer spending on paid content on the Web, for information ranging from personal ads to pornography, will grow by 25 percent this year to reach the $2 billion level, according to Jupiter Research. However, online advertising remains the best revenue opportunity for online media businesses. The research firm estimated that ad sales would total $6.2 billion this year. "Consumers are slowly opening their pocketbooks for paid content," said David Card, a Jupiter vice president, during a company-sponsored online industry conference in New York. Paid content publishing, like revenues from syndication of content, will suffer from lots of competition. Leaders are only beginning to emerge, and consumers are reluctant to deal with multiple accounts and sellers, Card added.
CBS.MW

TRADITIONAL ADVERTISERS WARM TO WEB
Major advertisers including the Walt Disney Co., AOL Time Warner and DaimlerChrysler were among mass marketers that increased their purchases of banner advertising on the Web last year, according to Nielsen/NetRatings. "No longer dominated by the smaller dot-com companies, traditional business-model advertisers are staking their claim," said Charles Buchwalter, vice president of client analytics. "This increased usage by the heavy hitters of advertising clearly signals their recognition of the validity of the Internet as an effective ad medium." The Web's three major portals, America Online, Microsoft's MSN and Yahoo were the largest beneficiaries. Each was able to do business with at least 70 of the top 100 advertisers, the research firm said.

PBS OPENS THE DOORS TO ITS NEWEST EDUCATIONAL OFFERING, PBS CAMPUS Today PBS announced a new Web resource, PBS Campus (www.pbs.org/campus), which provides information about distance learning at the college level. The site includes a searchable database of distance learning courses as well as enrollment information. The program is a partnership between PBS, local public TV stations and colleges nationwide: PBS offers course materials while the institutions provide professors and award degrees.

GOSSIPY SITE THREATENED
FoodserviceRumors.com is on notice. "U.S. Foodservice threatens to sue gossipy Web site aimed at industry. Operator gets testy letter from ailing firm's lawyer," says a message on the site owned by Stephen Hoschler. It has been in business five years as a forum for disgruntled employees of food-service companies. Attorneys representing U.S. Foodservice Inc., a Columbia, Md.-based division of Royal Ahold, have threatened legal action against Hoschler for "false and defamatory" statements posted on the site. The site has purported internal documents and memos of U.S. Foodservice, the Washington Post reported. In reaction to the lawyers' efforts, Hoschler has shut down the site's message board. But on the site, he also says, "We will return in our normal format VERY SOON."

ONLINE TAX DEBATE HEATS UP
SAN FRANCISCO (CBS.MW) -- Unlike the real world where consumers make up two-thirds of spending, on the Internet the transactions are dominated by businesses selling to other businesses.

This is an important distinction, because that's the portion of online activity that cash-starved states are eyeing when it comes to collecting taxes on online purchases.

The estimated loss in sales tax for all states is $13.3 billion in 2002, and rising to $14 billion in 2003, according to a study conducted by the University of Tennessee. The sales comprise purchases by consumers and businesses.

Those numbers are giving states ammunition and momentum to get some nationwide tax-collection law under way. Earlier this week, the Republican-led New York state Senate passed a bill authorizing sales tax collections on purchases made on the Internet.

But it's those same numbers that have Internet companies and catalog companies up in arms. They say the numbers are grossly overestimated.

On Thursday, the Direct Marketing Association, which represents thousands of remote sellers, from traditional catalog companies and more recent e-tailers, is expected to release a government study that refutes the online e-commerce figures that are being projected.

The DMA also plans to hold a conference call among leading e-tailers like EBay and such catalog operators as Federated Department Stores.

The DMA is focusing squarely on the University of Tennessee study, which used Forrester Research's e-commerce projections for 2002 and beyond as the revenue base.

PC Mag's Top 100 Web Sites

From Masha E. Geller, MediaPost magazine:

A study recently conducted by Survey.com on behalf of Forbes.com and GartnerG2 confirms yet again that the web is a great place to reach C-level executives (Chief Executive titles—CEO, CFO, CIO; plus Owner/Partner). Based on 11,000 respondents, not only is the Internet a huge part of their work lives, they’re best reached early in the morning and actually click on ads, too.

Even though the study was Forbes-commissioned and will undoubtedly go straight into the site’s media kit, the stats certainly pertain to the rest of us. For starters, more than half of C-level execs (53%) say they access the Web before they go to work, while only 41% said they read a newspaper before going to work.

"These results reflect a now irrefutable truth - that the Web has become an integral part of a senior executive's business day," said Jim Spanfeller, Forbes.c om president and CEO. "That CEOs are logging onto the Web in the morning before reading a newspaper is proof that the Web truly is 'the medium of choice' for senior business decision makers."

Notably, more of the C-level respondents (58%) do online research than use the Web to check their portfolio (33%). Only 11% delegate online research to their assistants. What’s not surprising is that 82% of C-level executive respondents said they check their email before they start other work (only 6% said they have an assistant do it for them).

As for ads, nearly half (48%) of C-level respondents say they "click on online ads" when they “see something of interest.” This one is sure to spark debate.

Wired News: Cities Deliver Broadband for Less

For those willing to forego some sunny weather in return for a speedy and reliable Internet connection, Tacoma, Washington, might qualify as budget paradise.

For around $30 a month, city residents can choose among four cable broadband providers. For another $25, they can get a standard cable TV package with about 50 channels, with a choice of two providers, the city-owned Click Network or AT&T Comcast.