« Apocalypse Yahoo? | Main | You Can’t Wake Up a Dead Man »
E-Commerce Will Take Big Hit as States Close “Amazon Loophole”
By dave_pasternack | April 29, 2008
Last Friday, Google’s chief economist pointed to figures suggesting that even a severe recession won’t dent e-commerce (which apparently has grown 22 percent in the past two years). The economist went so far as to claim that a recession helps e-commerce, “because cautious consumers are doing more research and comparison shopping online before making a big purchase.”
The real problem — and it’s an obvious one — is that e-commerce is about to get hit by several unstoppable factors which will inevitably slow it down. As my colleague Mark Simon noted last week, cash-hungry New York State, whose property-based revenues have been depleted by the subprime mortgate mess, has enacted a tax on Internet retailers, and it’s a sure bet that other states will follow suit. Online shopping will grow less attractive as fuel prices surcharges are added to the shopping bill. E-commerce will survive, but the kind of growth we’ve seen will plauteau and maybe even fall once states stop footing the bill for Amazon and its ilk. We’re still at the leading edge of the damage to state finances, and somebody’s going to have to pay for schools, roads, police, and other essential state services. Once New York’s bill goes into effect, look of other states to get on the “soak the merchants” bandwagon.
Topics: Online Ad Industry Foolishness |
Comments
You must be logged in to post a comment.