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Dell unveils Internet store
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March 3, 1999: 2:43 p.m. ET
Direct PC vendor, eyeing 70% of its sales online, launches Gigabuys.com site
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NEW YORK (CNNfn) - Hoping to accelerate already-strong sales through the Internet, Dell Computer Corp. unveiled a new online shopping site on Wednesday to market personal computers, software and peripherals.
The store, located at Gigabuys.com, offers customers some 30,000 products, including printer cartridges, digital cameras and software titles - with another 10,000 made available by later this year.
Dell is no novice to electronic commerce. In an interview with CNNfn, Dell founder and Chief Executive Officer Michael Dell said the direct PC seller's Dell.com site racks up sales of $14 million a day - making it one of the busiest PC vendors online.
"Dell is already a leader in online commerce," Dell said, adding that Dell.com received some 25 million visitors in the fourth quarter alone.
Dell.com sells only Dell PCs and a limited number of accessories that work with them, such as memory chips and modems.
"With Gigabuys, we'll be extending our relationship with those customers, offering them a wider range of software, peripherals, accessories - and also opening up the market to customers who have never bought Dell systems," he added.
Internet-related sales made up a quarter of Dell's revenue in the fourth quarter, Dell said, adding "we are well on our way to our goal of 50 percent online - and actually think that after 50 percent it's going to keep going to 70 percent."
"This is definitely a key thrust for us," he said.
In the interview, Dell said he doesn't believe the hard-won brand-name recognition of Dell products will be compromised by the launch of a differently-named online store.
"It will be clear to customers that Gigabuys.com is from Dell, and comes with the same trusted brand and service relationship that Dell offers," he said.
Dell is trying to keep ahead of the game as rivals Compaq (CPQ) and Gateway (GTW) have started selling computers via the Internet. And it comes at a time of declining prices, and thus profit margins, for PC vendors.
The unveiling of Gigabuys comes against a unusually unfavorable mood about Dell's stock on Wall Street, after the company didn't hold up to the high standard of revenue growth analysts had set for the company in its latest quarter.
Dell reported growth had slowed to 38 percent, from an average of 56 percent in the previous eight quarters.
Investors weren't too convinced - at least so far - that Gigabuys.com will be a boon for the company in the midst of the pricing pressure in the sector. In the early afternoon Wednesday, Dell (DELL) shares were up 5/16 to 78-3/8.
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