Partner With Us Home Improvement Televisions Get Business Software Compare Prices Online Shopping Promote Your Website Promotional Golf Memory Logo Design Phone Cards Promos and Premiums Memory Upgrades Find Software Web Hosting Directory

Compaq Computer Corp. confirmed a report it had halted sales of consumer personal computers to Internet-only retailers, in a sign of conflict between traditional retailers and online outlets.

Leslie Adams, Compaq's U.S. director of consumer marketing, said the company had at least temporarily revoked authorization for Internet-only retailers to sell its Presario line of PC products for a 90-day evaluation period beginning Feb. 15.

She said the suspension affected "less than ten" online retailers including Value America, Cyberian Outpost , CompuCom Systems Inc.'s PCSave unit and Buy.com, which is backed by Japan's Softbank Corp.

Also caught up in the action was Shopping.com, an online retailer Compaq has agreed to buy and merge into its AltaVista Internet media and electronic commerce unit.

Adams was responding to a story that first appeared in Monday's online edition of industry trade magazine Computer Retail Week, a publication of CMP Media.

"Authorization for the time being has been suspended," Adams said of the approval distributors must have from Compaq in order to resell the computer maker's products.

Ingram Micro Inc. and Tech Data Corp. , the leading wholesale distributors of PCs, who sell Compaq PCs to Internet retailers, were asked by Compaq to quit selling PCs to the companies while it evaluates its online sales strategy.

Internet retailers function as electronic order-takers for consumers using online catalogs, often counting on distributors like Ingram or Tech Data to ship products directly to consumers.

In many cases, this approach eliminates the need for online retailers to carry inventory of their own -- saving such companies vast sums of up-front investment and allowing them to offer what are in effect wholesale pricing over the Web.

This fast-emerging sales avenue threatens the standard price mark-ups charged by bricks and mortar retailers.

Adams said Compaq took the action in response to the growing number or requests to sell via the Internet, not only by online retailers, but from its traditional retailers who are opening online outlets. Compaq itself also is beefing up efforts to sell PCs direct to consumers via its own Web site.

She said sales to the group of Internet retailers represented an insignificant part of its overall business. "They weren't even on our radar until recently," Adams said.

But Schelley Olhava, a consumer PC analyst with International Data Corp., said Compaq's action was the latest sign of growing pains between the computer maker's mainstay traditional retail distribution lines and newer Web outlets.

"Our (distribution) program is really designed for a standard retailer that carries inventory, provides customer service ... and other on-floor support," she said of her company's continued focus on face-to-face sales in stores.

"All of the programs we offer are really inappropriate" for Internet retailing, Adams said of how Compaq was rethinking its approach to Web sales. "How do you have programs that help you optimize and grow that business?" she asked.

Compaq is the world's No. 1 supplier of PCs, both for consumer and corporate markets.