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February 13, 1996

Wal-Mart to Experiment on the Internet

By PETER H. LEWIS

In a move certain to accelerate the acceptance of computer-based shopping, Wal-Mart Stores Inc., the nation's largest retailer, said Monday it would begin trials next month of a system for selling its merchandise over the Internet. Microsoft Corp. will supply the software for the experiment.

"We believe it's a concept whose time has arrived," said David Glass, the president and chief executive of Wal-Mart, based in Bentonville, Ark. Electronic retailing, he said, will "create a tremendous opportunity to serve customers that we don't presently serve or who are limited in time."

And if the trials are successful, he said, the company intends to move aggressively to expand the system.

Microsoft has been working with Wal-Mart to develop the software needed to conduct retailing operations on the Internet's World Wide Web. Both companies said Monday that the alliance was not an exclusive partnership and that Microsoft would not have a financial interest in Wal-Mart's electronic retailing.

Microsoft is developing a product called Merchant Server that requires Microsoft's Windows NT operating system. Merchants would use the server software to create data bases of goods, publish electronic catalogues, handle secure transactions and keep customer records.

A number of other companies, notably Netscape Communications Corp. and Open Market Inc., make competing software.

Mary Modahl, director of new media research at Forrester Research Inc. of Cambridge, Mass., said Wal-Mart's entry into electronic retailing would invigorate a market that has been moribund lately because of slow sales and concerns about privacy and the security of financial transactions.

"I think electronic retailing is heating up right now," she said. "Mastercard and Visa recently came together with a standard for doing secure credit-card transactions, and that has created a sense of optimism. Plus, there is strong growth in the on-line market as consumers continue to sign up."

Neither Glass nor William Gates, Microsoft's chairman, would estimate the size of the electronic retailing market, either in terms of customers or dollar volume.

"It's easy to over-promise and under-deliver, but we have an opportunity to build a completely different industry," Glass said.


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