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May 31, 2008 11:16 AM PDT

Overstock sues New York over Net sales tax law

by Anne Dujmovic
  • 24 comments

Overstock.com has filed a lawsuit challenging a New York law that expands the state's requirements for online retailers to collect sales taxes.

The Utah-based company announced Friday that it is asking the court to issue an injunction and declare the law unconstitutional.

In April, Gov. David Paterson signed a new law requiring companies that pay New York-based entities for "directly or indirectly referring customers" to their retail business to collect sales taxes from New York-based customers. The new law goes into effect Sunday. It's an attempt to get around a 1992 U.S. Supreme Court decision in the Quill v. North Dakota case that says retailers aren't required to collect sales taxes from customers who live in states where the businesses don't have a physical presence.

About two weeks ago, Overstock announced it was cutting ties to its New York-based affiliates because of the new law. The discount online retailer said it told its more than 3,400 affiliates that as of Sunday they would no longer be able to provide advertising for the company.

"I am confident of our position in the suit," said Mark Griffin, Overstock.com general counsel, in a statement. "The applicable United States Supreme Court cases on the question of whether the state can collect taxes under these circumstances make it clear that New York cannot constitutionally require Overstock.com to collect these taxes."

The New York State Department of Taxation and Finance, tax commissioner Robert Menga, and Paterson are named as defendants in the suit filed with the New York State Supreme Court.

Amazon, which filed a similar suit in April, has said it plans to abide by the law and begin collecting New York state sales taxes.

CNET News.com's Anne Broache contributed to this report.

January 31, 2008 3:28 PM PST

Add online ticket sellers to Hannah Montana's fan group

by Michelle Meyers
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Hannah

A still from the 3D film, Hannah Montana & Miley Cyrus: The Best of Both Worlds Concert, which opens Friday for a one-week theater run.

(Credit: Disney)

It's not just screaming little tweens who are buzzing about Disney's Hannah Montana 3D concert film, which open in theaters Friday for a one-week run.

Having already sold out during popular show times in certain markets, Hannah Montana & Miley Cyrus: The Best of Both Worlds Concert, is no doubt making online ticket sellers happy, too.

For example, Fandango.com, the largest online movie ticket seller, is likely to mark January as one the most--if not the most--trafficked month in its eight-year history. "Most of the traffic is due to Hannah Montana," said Fandango spokesman Harry Medved, who added that it's the site's "biggest concert film ever" in terms of sales.

And that says something, especially because the film is only playing in about 700 already 3D-equipped theaters nationwide and is only screening for seven days.

For those readers (who, unlike me, as a mom) aren't privy to fads among Disney-controlled prepubescent girls, Hannah Montana is a pop sensation fueled by her TV persona a la Donny and Marie, The Partridge Family, The Monkees, or, my personal favorite, Shaun Cassidy (of Hardy Boys fame). The Hannah Montana hype, however, has hit modern-day levels of rabid consumerism, with merchandise ranging from video games to a clothing line.

Montana is actually Miley Cyrus, daughter of country star Billy Ray Cyrus. Her rise to fame began with the launch two years ago of Disney's Hannah Montana TV show, in which she hides her pop star identity in order to live a so-called normal teenage life in Malibu, Calif.

The wildly successful show led to the release of two Hannah Montana albums and a sold-out concert tour that set attendance records and triggered parents to reportedly pay some $500 per ticket.

Many people think the movie is a response to the concert--an attempt to give those who couldn't get tickets to the show a chance to see it. That, a Disney representative said, is a misconception. The film was planned long before the concert tour, which wraps up Thursday, the representative said. The unusually short one-week theater run, she added, is meant to make it more like a concert event.

The film was made using a custom-made 3D camera system developed by James Cameron and Vince Pace. In production notes, Pace described the system as having two eyes, in the form of two high-definition cameras, and a very powerful brain, in the form of a computer.

"James Cameron and I set out to change entertainment as we know it by designing the tools necessary to shoot a new form of 3D, one that is based more on experience than effect," he said.

U2 3D, of course, beat Hannah Montana to the punch. But in my 8-year-old daughter's eyes, Bono's got nothing on the Jonas Brothers, who are special guests in the Hannah Montana film.

November 28, 2007 8:58 PM PST

How sustainable is Black Friday?

by Brian R. Brown
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Black Friday and Cyber Monday have come and gone, kicking off the 2007 holiday-shopping season...apparently in full force.

As you are probably aware, Black Friday is the term in the U.S. for retail shopping on the Friday after Thanksgiving, and Cyber Monday refers to online shopping on the Monday following Thanksgiving.

These have become milestone shopping days that retailers use as indicators for the health of the holiday-shopping season. While they are often referred to as the busiest or even biggest shopping days, they are quite often trumped by other days leading up to Christmas.

Retail, probably more than any other business, seems to live and breathe on year-over-year and comparable-day sales comparisons. Ask even the smallest retailer you know how they are doing, and without a blink they can probably quote how the day, week, and month are stacking up compared with a year ago.

While economic conditions, weather, and countless other variables can greatly impact sales, I have to imagine that most retailers would feel like a high school football team losing their homecoming game if sales fell even slightly below the previous year. Nothing seems to soften that blow.

What really struck me this year, though, was hearing reports of malls opening at midnight and other stores opening up earlier than ever before. I couldn't help but wonder: how sustainable is Black Friday sales growth?

The National Retail Federation reported that Black Friday weekend traffic was up 4.8 percent over last year, but average consumer spending was down 3.5 percent from last year. The NRF projects that holiday sales will rise 4 percent, though, so perhaps it will all be worth it when all the numbers add up after the season has come and gone.

But in the back of my mind, when I start thinking about extra staffing, overtime pay, holiday pay, and perhaps even lower gross margins or even losses on some of the door-buster specials, I wonder what the result of net sales is and whether it is really all worth it? How quickly will the point be reached when you can't open any earlier, drive any more store traffic, or offer enough hot deals to justify it all?

Enter Cyber Monday
Based on survey research from Shop.org, this fact isn't lost on retailers. While Black Friday won't be disappearing anytime soon, many retailers are looking to how they can further tap into the online market to drive sales. I'm sure their data includes retailers that are strictly online-based, but seeing how 72.2 percent of them planned special promotions for Cyber Monday, up from 42.7 percent from two years ago, online holiday sales look to have a pretty solid future.

And if those numbers don't indicate retailers' interest, perhaps the prime-time TV commercial I watched while writing this does. It was for a very well-known national electronics retailer with over 600 retail stores in the U.S. alone, yet the commercial focused solely on its Web site.

Perhaps the number that has online retailers already smiling this year though was from the Shop.org survey that revealed that 72 million Americans--11 million more than last year--planned to shop online this past Monday. Maybe next year more shoppers will measure the shopping season based on remaining online shipping days than store shopping days, and more retailers will start planning their holiday calendar around SEO.

Originally posted at Searchlight
October 22, 2007 1:22 PM PDT

Ticketless baseball fans in Denver

by Steven Musil
  • 6 comments

Updated Oct. 23, 11:50 a.m.; details at bottom.

What if you threw a World Series and no one came because they couldn't buy tickets?

That is the dilemma facing the Colorado Rockies on Monday after the baseball team suspended online ticket sales because servers were overwhelmed by traffic.

"We are as frustrated and disappointed as (fans) are," Jay Alves told The Denver Post, adding that team officials had no idea so many people would try to use the Web site.

The team said it would honor the several hundred tickets already sold but it's unclear how or when sales of tickets will resume for the series, which kicks off in Boston against the Red Sox on Wednesday. The series moves to Denver for game three on Saturday.

Tickets were supposed to go on sale at 10 a.m. MDT, but many fans reported getting messages at that time that the server was full when they attempted to make ticket purchases. The newspaper reported that the breakdown was due to a problem with the ticketing software operated by Paciolan, an Irvine, Calif.-based ticketing company. The problem reportedly also affected other Paciolan customers, including the University of Colorado football team.

Because ticket sales were planned to be conducted only online, many fans are apparently converging near Coors Field in hopes that the team will sell tickets in person through the box office; so many in fact that the police have closed streets around the ballpark and are erecting barricades, the paper reported.

October 23 update: A day after saying that ticket servers buckled under the traffic of 8.5 million hits, team officials now say the servers crashed as a result of an "external, malicious attack." Neither the team nor Paciolan offered any details about the attack, but some speculate that it could have been a denial-of-service attack.

Some 18,000 tickets for each game remain unsold, and the team plans to try to resume ticket sales Tuesday.

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