Amazon says it is advertising when it compensates New York-based websites for posting links that refer customers to Amazon.com. New York says it’s soliciting business. The distinction means all the difference in the world for sales taxes, for Amazon, and possibly even print media, television and radio.

Amazon.com sued New York State earlier this month, challenging a newly enacted law that has serious implications for online advertisements. In April, the New York legislature passed a law designed to increase sales tax revenue from Internet sales. The law is known as the “Amazon tax” because of the way it broadens the sales tax law to apply to Amazon’s Associates Program, thereby achieving the necessary legal nexus for New York to force Amazon (and other Internet retailers) to collect and remit taxes on all sales to N.Y. residents.

A little bit of history helps put this law into context. The Supreme Court has held that a state can only impose sales or use tax-collection obligations on an out-of-state retailer if the retailer has a “substantial nexus” with the state (the Quill decision). Nexus occurs from a sufficient physical presence, which can be an office or warehouse, but physical presence can also derive from soliciting a state’s consumers via sales representatives located in the state. However, it can’t be just any sales rep, according to another Supreme Court case—in-state representatives must be “significantly associated with the taxpayer’s ability to establish and maintain a market in the state,” according to Tyler Pipe v. Wash. Dept. of Rev.

Amazon doesn’t have an office, warehouse or other physical presence in New York, but it has thousands of New York-based members of its Advertising Associates program. Per the Quill decision, advertising alone is insufficient to establish a substantial nexus. So New York has changed the definition of what it means to be a sales representative to capture these in-state associates that Amazon says merely hosts its ads. Under the new law, New York has changed the presumption of what it means to be “soliciting business” in the state. (more…)

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There’s no denying that the main objective for any e-commerce sales or retail marketing executive is to maximize the total value of visitor traffic on their site, simply put— turning web browsers into buyers and clicks into cash. Search is certainly leveling the playing field as well, so how do companies stand out from the crowd? And why are some sites still failing to deliver compelling and relevant content to their customer base?

In today’s saturated marketplace, retailers can no longer rely on the traditional marketing techniques and media vehicles to manage customer interaction and drive home sales. In order to achieve greater web interaction optimization, e-commerce and retail sites must recognize the inherent value of social behavioral merchandising and effectively increase the relevance of communications by automatically promoting the most relevant products to each visitor, thereby maximizing conversion rates and average order values.

By making websites more customer-centric via these “recommendation engines,” retailers can essentially optimize customer interaction through improved content and messaging based on a customer’s specific needs and behavioral patterns.

We all know who Amazon.com is. Besides the millions of SKUs at Amazon.com, the site is easy to use and “steers” browsers in the right direction when they need help (recommendations, user reviews, etc.). The addition of recommendations from other customers can build a sense of trust and community between new and returning customers—and probably better than any 17-year old working the floor at Border’s Books.

Given the wide variety of tools available in the market, online retailers must familiarize themselves with the different points of customer contact and approaches towards reaching interaction optimization. The Customer Interaction Cycle, shown below, depicts the many different points—from initial landing page through transaction—where collective intelligence can be applied to maximize value.

Rolf Elmer is CEO of Avail Intelligence

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Well, it’s getting to my favorite time of year! No, I’m not talking about the NHL and NBA playoffs, although they’re a bonus. I’m talking about an annual tradition where the cherry blossoms accent our nation’s capital and ERA members congregate to discuss with lawmakers important issues that affect the very vitality of our industry.

I was lucky enough to be embraced by the direct response community about 15 years ago. And, in that time, I’ve seen a lot of changes that have been mandated down to us by the very people we put into office to govern us. Most legislation I’ve applauded because it makes us stronger as an industry and solidifies our future. Some I’ve scratched my head at and wondered why they came to the conclusions they did. In the end, I determined that you and I are ultimately to blame for their poor decisions. WHAT?! YOU? ME?? How can one person or an individual be saddled with this blame? But, in reality, standing idly by and not participating in the legislative process is why.

ERA realized this fact three years ago and put together the Government Affairs Fly-In. It is an easy way to make our voices heard. I was fortunate enough to be a part of the first session. I was absolutely giddy to be a part of something so important. Upon arriving for the day’s events, we were broken up into teams and assigned a lobbyist that would serve as our guide through the halls and administrative offices of Capitol Hill. Each lobbyist caught us up to speed on the pending legislation. That year, it was net neutrality and online taxes, and how we could present our side of the issue in a uniformed and concise manner. We were also given a list of our congressional and senate members we had prearranged meetings with. Participation, so far, in the legislative process was as easy as getting on the waiting bus outside the hotel that took us to Capitol Hill.

Once on the Hill, our teams split up and headed for our perspective meetings. Standing on the front steps of the Capitol, I couldn’t help but feel dwarfed by the immenseness of what I was about to do. On the bright, sunny day, I reached the top of the stairs and took one last look down the Mall with its monuments and reflecting pools and knew this was going to be a special day. Entering the building I couldn’t help but feel that this is what our country is about. Hundreds of people swirled around me as they swept their way to their destinations at all levels of the rotunda. What struck me the most was how relatively quiet it was. I could hear every step I made on the marble floors echo through the labyrinth of hallways. It served as a comforting melodic beat as I moved to my meetings.

My first meeting was with a well-tenured congressman from Arizona. He and his staff were warm with their welcomes when we arrived. When we sat down, they listened respectfully as each one of us presented our part of the solution to pending legislation. It was an easy-going give and take of dialogue as the topics of our industry rolled on. Before I knew it, an hour had passed and our points were presented satisfactorily. Each meeting afterwards progressed in the same manner, with each party treating the other with respect and quite a bit of admiration for the task at hand. It was, to me, the democratic process at its best and as it was designed to be.

Getting on the bus to head back to the hotel, I took a last look back at the lit Capitol, shining outward into the night sky, and reflected. I realized then that we all made a difference that day because we came to voice our opinion on subjects that were important to this industry and to our livelihoods. I can remember a time when I thought I was a part of the legislative process by merely voting for my representatives. But, I now realize that checking a box (or hanging chad) is not the end of individual responsibility in the legislative process—it is only the beginning. The next step is as easy as joining hundreds of your fellow colleagues and me, on May 20th, on Capitol Hill for ERA’s GA Fly-In. I’m hoping to hear more than my own footsteps echoing through the halls, but rather the thunderous roar of all of us marching to ensure we influence those who influence us. After all, we’re all in this together!

Scott Swanson is vice president of sales for Motivational Fulfillment and Logistics Services

Have you been the GA Fly-In before? What was your experience like?

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Every morning I listen to the radio while I’m getting ready for work. Today was kind of interesting in that there were several sound bites from the president and would be presidents about various ideas to solve the “energy crisis.” While I have chosen a specific candidate for whom I am rooting, I have to say that my candidate’s response did not impress me. In fact, none of the proposed suggestions impressed me. Each seemed to be a half assed suggestion designed to get votes that would end up costing us more money in the long run and would not present a real solution to the problem.

After the politicians got done railing about things government could do to solve the problems, there was another story that caught my attention. It seems the Rockefeller family is demanding that Exxon Mobil invest more money into research on alternate fuels sources. You see, the Rockefeller family has a $4 billion stake in Exxon Mobil and they have this crazy idea that maybe the company should do a little work to develop potential revenue streams in case the public has actually gotten the notion that dependence on a finite resource for all of their energy needs is sort of a bad idea, or in case that finite resource reaches the ultimate fruition of its finiteness. While this is obviously an instance of the Rockefellers wanting to remain rich (and who can blame them?), it is refreshing to see someone stepping up and saying “Hey, you know what, we have a few billion dollars in record breaking profits this year, let’s get ahead of the curve, stop waiting for government subsidies to support this research and let’s just knuckle down and build something.” In other words: getting America back to the business of doing business, instead of hiding in a corner bitching about foreign competition, waiting for someone to hand them a subsidy, a tax break, and a tariff to cover their ass…

By now you are sitting there thinking, “What the hell does this have to do with electronic retailing?” Well, hearing about the Rockefellers take action made me wonder: Although I don’t have $4 billion invested in a single chunk with a company I can influence, let alone $4 billion, I started wondering if there was stuff I could be doing that would make a little dent in the fuel situation. The consensus seems to be that fuel prices are being driven higher by demand. So, the solution would be to stop buying gas. Well that’s all well and good, but I already use public transportation to get to work (a luxury we have in DC), so the only reason I ever really use my car is to go shopping.

That was when it occurred to me that shopping online or over the phone is the equivalent of carpooling to buy stuff. Here’s the scenario: on my street there is never a parking space… (more…)

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During my senior year of college, I was part of an intensive journalism program where I had to show up Monday-Friday from 9-5 to further develop my skills before entering the scary real world. It was almost like a forced internship, if you will. My concentration within the school of journalism was print, rather than broadcast, multimedia, advertising or public relations.

It was a rather sunny day in South Carolina, as I raced across campus for the first day of my new program. Hung-over, disheveled, and now awkwardly sweaty, I made it through the classroom door with just a few seconds to spare.

“I don’t know why you’re even here,” professor Fisher said to the class. “You’ve spent four years learning about a dying industry.” Wow. Not what you want to hear while calculating your looming student loans in your head. I thought I was just going to receive the syllabus and call it a day! He went on to explain dwindling advertising revenues and circulation rates for newspapers as the reason for his dark humor.

Things have changed even more dramatically since that spring day a few years ago. Newspapers have continued to fade, and TV has begun to fade as well, as the Internet continues to gain steam as our society’s main platform for entertainment and news. The ad spend budget for the Internet is now poised to surpass TV in the UK. As with popular music trends, it’s only a matter of time before that’s the scenario in the U.S., as well.

That same South Carolina professor once read a quote from Molly Ivans that I still have trouble shaking. “I don’t so much mind newspapers dying—it’s watching them commit suicide that pisses me off.” As a magazine focused on educating multichannel marketers, we urge those in traditional media spaces not to be the next medium to meet their demise. With the research, webinars, seminars and conferences that ERA and Electronic Retailer put on throughout the year, you can be sure to remain relevant and viable in this ever-changing media landscape.

If you think a world without newspapers seems likely down the road, check out this hilarious clip from South Park that highlights a world without Internet, and what effect it has on our behavior and media consumption.

Pat Cauley is Electronic Retailer Magazine’s eMedia Editor

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If you’re an events manager with a death wish, invite Jason Calacanis to deliver the keynote address at your next conference. Sure, Calacanis—a serial Internet entrepreneur who made the bulk of his fortune with the sale of his company Weblogs, Inc. to AOL—will deliver an engaging, thought-provoking and sometimes flat-out inspirational talk. But then again, he might just start a riot.

After all, this is the guy who, at SES Chicago in 2006, announced—to a group of search professionals—that “SEO is bullshit!” and compared those engaging in SEO to “snake oil salesmen.”

It didn’t go over well.

Having escaped Chicago, living to speak another day, Calacanis recently addressed a room full of affiliate marketers at the Affiliate Summit West. Apparently unruffled by the flap and furor over his SEO comments, Calacanis explained to the affiliate folks that the rest of the industry saw them as the bottom rung of the food chain, wired to make the quick buck.

There was no standing ovation.

But to be fair to Calacanis, he’s not some sort of egomaniacal misanthrope who gets a perverse pleasure out of standing on a stage and belittling the audience. (Actually, he might just take a little pleasure in it.) In fact, the point he’s trying to make is a valid and intriguing one.

First of all, Calacanis was over-generalizing for effect: he sees value in ethical SEO and understands that there are legitimate best practices to follow in designing, maintaining and promoting a site that will allow it to rank higher in search results. And he certainly doesn’t see anything wrong with the fundamental concept of affiliate marketing: engaging a group of websites to help sell product or generate leads as a sort-of extended sales force.

Calacanis has a problem with those interested in gaming the system to make a quick buck—whether it’s the black-hat SEO firm that exploits a weakness in a search engine algorithm to garner a temporary high rank for an undeserving website (until the search engine closes the loophole and the site plummets off the search results page) or the affiliate who steals content to game the search engines to generate more traffic and commissions, or the marketer who floods blogs, message boards and social networks with paid posts.

According to Calacanis, it’s all borne out of a misguided ethic that has pervaded the Internet since the mid-’90s: if one is technically capable of doing something, then it’s OK.

But he—and others—see reason for optimism. As more and more black-hat marketers exploit the various systems, these systems eventually break down, to be replaced by ones that are more resistant to gaming. Consumers are helping to drive change, too. We leave MySpace to go to Facebook and then to LinkedIn as policing technologies are developed that help eliminate spam or fraud. Sites like Angie’s List—a ratings and reviews site for home-improvement contractors—take off because they are curated to ensure the reviews’ (and reviewers’) legitimacy. In other words, because they earn our trust. Calacanis himself has developed Mahalo.com, a search engine that uses human beings to find and organize the best links for given search terms—and to filter out irrelevant or spam results.

A new ethic is evolving: trustworthiness is good for business.

Tom Dellner is executive editor of Electronic Retailer Magazine and editor of its supplement, Online Strategies

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In preparation for our upcoming May “Green Issue,” we have just one question for you: What has your company done to go green? From retailers to suppliers, if there is an element of your business that’s done something positive for the environment, we want to hear about it! Simply click the comment link below or e-mail Vi Paynich, editor-in-chief, at vpaynich@retailing.org. We may include your story in the issue.

Vi Paynich is Electronic Retailer’s editor-in-chief

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In the past few days, Comedy Central has taken a brazen approach to some of the issues we deal with day in and day out. The virtual world Second Life is one of those buzzwords often thrown around conferences by people trying to sound like they know what they’re talking about. Many well-known companies have spent lots of money jumping into Second Life to have a virtual world presence, but I think they were simply jumping the shark.

Second Life, like many other platforms on the Internet, has not taken off quite as expected. “The Daily Show” had quite the time making fun of Second Life. Enjoy the clip below:

A recent “South Park” episode was no stranger to speaking on the Internet’s monetization problems. The boys create a hit YouTube video thinking they’ll rake in some fast cash, only to find themselves waiting in line for “theoretical dollars” at the Department of Internet Money, along with other Internet celebrities. A full list of the episode’s clips can be found here. However, enjoy below Kyle’s closing insights on Internet revenue:

What are your thoughts on monetizing the Internet?

Pat Cauley, eMedia Editor, Electronic Retailer Magazine

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