The chief executive of SBC Communications Inc. ( search) thinks companies doing business on the Internet, such as Microsoft Corp. and Vonage Inc., are due for a wake-up call.
"How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them," said Ed Whitacre in a BusinessWeek Online interview. "What they would like to do is use my pipes for free. I ain't going to let them do that."
He argued that because SBC ( SBC) and others have invested to build high-speed networks, they are due a return.
"There's going to have to be some mechanism for these people ... to pay for the portion they're using. Why should they be allowed to use my pipes?" He offered no details how his idea could be accomplished.
For an Internet company to "expect to use these pipes free is nuts!" Whitacre added for good measure.
$18 billion seen for holiday e-commerce
As many as 2.5 million new Web users will spend some of their holiday dollars online this year, leading analysts to expect online retail sales during the season to reach $18 billion. "This is shaping up as a good -- not great -- holiday season," says Carrie Johnson, vice president and research director at Forrester Research ( FORR) . "The mainstreaming of the Web means that if offline retail sales suffer, online sales do as well. The average online consumer is no longer insulated from broader economic concerns such as volatile energy prices." She said strong sellers will be items such as consumer electronics and toys but also expects strong business for apparel sellers that provide sophisticated tools for illustrating styles and fit.
Digital music sales spur spending for content online
Consumers spent nearly $1 billion for online content during the first six months of the year, according to the Online Publishers Association, a New York-based trade group. Almost a quarter of the dollars went for what the association described as entertainment and lifestyle material, such as digital music. Michael Zimbalist, OPA's president, said online spending for content will continue to grow, fueled by the availability of broadband Internet connections. The downside to his report was its finding that nearly nine in 10 Web users didn't pay for any content.
Web sites offering research services, games and online dating showed gains, but general news sites -- such as NYTimes.com ( NYT) and Washingtonpost.com ( WPO) -- experienced a 14% decline in consumer spending. "Although revenue for general news is down, compared to spending in the second half of 2004, showings by business content/investment content (the third-largest revenue producer) indicate that consumers readily turn to the Internet for information," the report said. The report can be downloaded at http://www.online-publishers.org/pdf/paid_content_report_oct05.pdf.