Beyond.com Goes Beyond Online Selling in Deal with Symantec

In a new twist on e-commerce relationships, online software store Beyond.com (Nasdaq: BYND) has agreed, not only to sell Symantec Corporation’s (Nasdaq: SYMC) popular PC software, but to actually build and manage a separate online store for Symantec. The construction and management of the new Symantec store makes this a particularly far-reaching e-commerce reseller relationship, and might foreshadow a new role for online superstores, as site developers and consultants for other Internet-based stores.

With annualized revenues reported to be more than $600 million (US$) and some 2,400 employees, Symantec is one of best known software development firms worldwide. The company’s flagship software products include Norton AntiVirus, Norton SystemWorks, Norton Utilities, WinFax, pcANYWHERE, and Visual Cafe.

“After careful study, Symantec concluded that Beyond.com is the most effective outsourcing partner for Symantec,” said Pamela Roberts, senior director of e-commerce at Symantec.

Beyond.com as Web Site Developer?

While we tend to think of online stores as seeking to integrate and resell products from other vendors into their own e-commerce store, Beyond.com has stepped into the role of Web site developer and consultant in the past, creating distinct stores for others.

“Beyond.com has successfully created and continues to operate commercial Web sites on behalf of several, large e-commerce partners, including Autodesk, Microsoft and others,” said Mark Breier, president and chief executive officer of Beyond.com. “Companies choose to partner with Beyond.com because we help them operate e-commerce Web sites successfully.”

Even though Web site development and consulting may present an additional revenue stream for successful online stores like Beyond.com, the question arises of spreading the company’s skill set too thin. Should online stores focus on improving their core business, or should they make a move into the e-commerce service sector? Investors appear to be taking a wait-and-see approach, as Beyond.com’s stock fell slightly in midday trading, while Symantec’s stock rose.

Major Expansion

Online software sales continue to be one of the major driving forces in the growth of e-commerce. In the most basic of terms, all online shoppers are already using software to connect to the Internet and, as such, are potential purchasers of additional software applications and upgrades. Competition in this has been fierce, with e-commerce heavyweights like Amazon.com, BarnesAndNoble.com, Cyberian Outpost and Egghead.com leading the pack.

Recently, however, Beyond.com has made major gains in the industry by merging with BuyDirect.com, and by closing a distribution deal with Compaq computer.

The BuyDirect merger is valued at $133 million (US$) in stock, and brings Beyond.com several important benefits, including online software sales relationship with @Home Network, CNET and ZDNet.

Under the terms of the deal with Compaq, Beyond.com will provide online software services to Compaq customers and business partners. Beyond.com also plans to be a strategic partner for software and services offered through Compaq.com, including technical support.

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