Local E-Commerce Firm Wins Ad Battle With Mall.

ONLINE retailers 1, brick-and-mortar 0.

"We responded quickly and aggressively to the mall, and we were ready to go to court," said Jerry R. Welch, RightStart.com's chairman and CEO. "We will do anything we can to protect our business, and we believe the mall's actions were seriously misguided."

In the first face-off between traditional mall owners and e-commerce sites, Westlake Village-based RightStart.com successfully led a charge against a St. Louis mall that tried to outlaw all in-store promotions of tenant companies' Web sites.

St. Louis Galleria's management informed its 170 tenants the week before Thanksgiving that any in-store signs, advertising or display devices promoting e-commerce sites were prohibited. With Internet addresses now adorning everything from store windows to shopping bags, the prohibition was' a serious move by the mall owners to head off the loss of rental income to online sales. Mall tenants' rent usually consists of a fixed charge plus some percentage of sales revenue.

Only RightStart.com came back with the threat of litigation.

Right Start Inc., an independent but affiliated Westlake Village-based national chain with 50 brick-and-mortar retail stores that sell children's products, has a store in the St. Louis mall.

After the conflict was picked up by local media, sympathetic protesters congregated in front of the St. Louis Right Start store. Last week, the Galleria's management retracted its new policy and accepted what appears to be the inevitable direction of retail.

RightStart.com has a lot to fight for.

While the brick-and-mortar Right Start chain has been around for 15 years, the six-month-old RightStart.com expects its online sales this year to exceed those of the brick-and-mortar stores.

Both the online site and the brick-and-mortar chain now carry the same kinds of products-high-quality child development toys and child-related products.

But while Right Start Inc. caters solely to children from birth to 3 years old, RightStart.com is looking to exploit what company research has shown to be loyal customers, and now offers products for children from birth to 6 years old. Next spring, it plans to launch an online section for children 6 to 12.

RightStart.com also is looking to broaden its operations geographically. It currently only ships to U.S. customers, but within the next six months, it intends to begin offering shipments to customers in the U.K and Canada.

"The Internet doesn't take away from the brick-and-mortar stores, but complements them," Welsh said. "So far it has all come together beautifully for RightStart.com. We're very happy that the (St. Louis) mall has reconsidered."

Latin Sounds

With all things Latin topping the music charts recently, Universal City-based Universal Music Group has invested in Eritmo.com, a Miami-based Internet company that runs a site dedicated to Latin music and its fans.

Universal is the largest music company in Latin America and has one of the world's largest catalogs of Latin music, so Eritmo.com will expand Universal's reach into the market. With the investment, for which terms were not disclosed, Eritmo.com plans to enhance its online digital library, expand its e-commerce and international operations, and launch a multimillion-dollar advertising and marketing campaign.

While Eritmo.com and Universal hope to reach a largely untapped market for online Latin music sales, they face a stiff challenge in the United States. Research shows that many Latinos are on the wrong side of what is called the "digital divide," a growing socio-economic schism in Internet users.

Less than 17 percent of the U.S. Latino population used the Internet in 1998. Research conducted by The Industry Standard suggests that Latinos will account for less than 2 percent of the Web-surfing crowd this year.

News and Notes

El Segundo-based Computer Sciences Corp. has acquired ECS Integrated Technology Solutions, a Portland, Ore.-based computer consulting services company. The acquisition, for which financial terms were not disclosed, will expand CSC's presence in the Pacific Northwest and the company's expertise in Oracle software. In addition, CSC recently announced that it has signed a $65 million-per-year computer services contract with Raytheon, for an unspecified number of years...

Also in El Segundo, Infonet Services Corp. has filed with the Securities and Exchange Commission for an initial public offering that would raise over $710 million for the data communications company. Infonet provides companies with data services such as intranet, remote access and multimedia. The company intends to list its stock on the New York Stock Exchange as well as on the Frankfurt Stock Exchange...

Just in time for the holiday season, Westlake Village-based BeOutdoors.com launched its site last week. The e-commerce company offers products related to boating, camping, fishing, flying and hunting.