IBM Hopes Online Store Will Boost PC Sales

IBM Corp. Friday became the latest personal computer maker to announce plans to sell its entire product line over the Internet.

The company is targeting Dell Computer Corp., Gateway Inc. and Compaq Computer Corp., which itself is a relative latecomer to the Internet.

Dubbed Project Odyssey, IBM will concentrate on small businesses and consumers in an effort to boost its electronic commerce revenues which are already estimated to be about $38 million a day. While that total does include some PCs, most of the revenue comes from sales of high-end servers and other equipment for corporate customers.

IBM generated $3.3 billion in sales over the Web last year — a figure that’s expected to more than triple in 1999.

Analysts say the main risk to IBM’s move is it will alienate the company’s resellers who will suddenly find themselves competing with IBM for the same business. That same concern was one of the reasons Compaq didn’t begin embracing the Internet until late last year.

IBM said its resellers actually stand to benefit from its move online because they will be able to go after installation and service contracts. IBM’s services business is one of its fastest-growing lines. That unit’s revenue gained 20 percent in the fourth quarter while the company’s overall revenue climbed 6 percent.