Gateway and NECX Announce E-Commerce Deal

PC maker Gateway (NYSE: GTW) has invested $21 million (US$) to purchase a 19.9% stake in the NECX Office and Personal Technology Center, the e-commerce subsidiary of computer products reseller NECX. The deal includes an option for Gateway to buy the entire subsidiary.

Gateway and the NECX unit plan to launch a new e-commerce site called SpotShop.com. The new site will offer Gateway computer products, plus the approximately 30,000 hardware and software products in the NECX catalog, with the exception of those products that compete with Gateway.

What Gateway Gains

With this deal, Gateway is trying to position itself not just as a PC maker, but as a one-stop solution provider, including software and peripherals.

“Helping our customers get more out of the box and providing them with all their computing needs is an important focus for us,” said Ted Waitt, chairman and CEO of Gateway. “We set our sights high in our search for the best e-commerce company to round out our total computing solution.”

Keith Halloran, VP and director of marketing for NECX, said his firm will continue to market its products through its own Web site, and will continue to make its product catalog available to other organizations on a private label basis.

A Gateway spokesman said there will also be a link between Gateway’s current site and SpotShop.com. Currently, consumers can build their own Gateway PCs and purchase only a limited number of peripheral devices and other system accessories at Gateway’s site.

NECX Profile

According to NECX, which positions itself as “the hub for high tech commerce,” the company has processed more than 400,000 secure online transactions to date. Online revenues were $60 million (US$) in 1997, and more than $80 million projected for 1998. NECX reports that it resells approximately 60,000 brand-name electronic components, computer products, and connectivity equipment, from 20,000 global suppliers.

The company attributes much of its success to founder Henry Bertolon’s desire to “fundamentally change the relationship between retailers and customers.” One of the ways NECX does this is by displaying product reviews and pricing information from a number of other online commerce sites, and providing direct links to those competitors.