To date, I’ve only been able to identify one merchant who began collecting any state’s sales tax after enactment of this law: Amazon made a strategic decision to “collect the tax and sue” in New York, after its retroactive enactment of the law in 2009.  Amazon hasn’t repeated that strategy elsewhere.

In June, I posted my question on a popular affiliate-marketing discussion forum, asking if any publishers or retailers could identify any companies which began collecting sales tax in any state as a result of the “Advertising Nexus” issue. Nobody could name even one.

I also left a phone message and sent an email to Assembly Member Nancy Skinner, the law’s sponsor in California:

Ms. Skinner: I left a phone message, but thought I’d clarify my question. As you know, I’m upset about the “Advertising Nexus” tax law, which forced Amazon to stop paying me for advertising on my web site.

But I’m open to learning more about [how] California and other states benefit from this law. Specifically, could you name ANY online retailer which began collecting ANY state’s sales tax because of an “Advertising-Nexus tax law”?

I’ve only been able to identify one: Amazon made a strategic decision to “collect the tax and sue” in New York, though it hasn’t repeated that strategy anywhere else.

Surely North Carolina or Rhode Island should be able to identify some merchants who started collecting sales tax for those states after the Advertising-Nexus law was passed there. But they won’t say.

I’m not even going to be picky: I’ll include any merchant who changed their sales tax policy “near the time of” any PROPOSAL regarding an Advertising-Nexus bill, even 18 months before or at any time since, and even if the bill didn’t pass.

I’ve posted the question to several experts, who’ve all said the same thing: “That’s an interesting question.” Nobody has been able to identify a single merchant (other than Amazon in New York) who has begun collecting sales tax in ANY state, in a situation in which it could conceivably be argued that an “Advertising Nexus” proposal might have been a factor.

I would appreciate if you could identify any merchants you’re aware of, who have begun collecting sales tax for ANY state as a result of the “Advertising Nexus” issue being raised.

Ms. Skinner has not responded.

I’ve noted in other posts here that I believe that these laws are unwise, ineffective, and unconstitutional. They’ll eventually be stricken down by federal courts (but as legislators have noted, any taxes collected during that time would be kept by states). There are several much more effective, fair, and legally plausible strategies if states actually sought to force out-of-state retailers to collect sales tax. (Since those other strategies would actually be fair and effective, few legislators dare to propose them, and no lobbyists will support them.)

But given the precarious financial situation in California and other states, and my personal belief that out-of-state retailers should be required to collect sales tax for all states which impose them, I’d love to see some benefit from these laws. Seeing such benefits might reduce the sting from losing 26% of my advertising revenue on July 1.

But so far, the only effect of these laws has been the termination of advertising relationships with many thousands of web publishers (small businesses) in each state, shifting revenue away from states which enact “advertising nexus” laws, and thus reducing those states’ income-tax revenues while collecting no additional sales taxes.  Some of these small businesses have actually moved to other states, in order to retain their advertising relationships — thus shifting jobs, payroll taxes, and 100% of their income tax to other states.

Please prove me wrong: please identify any company which began collecting sales tax in any state as a result of any Advertising-Nexus Tax Law (“Amazon Tax”).

Wikipedia defines the term as:

A perverse incentive is an incentive  that has an unintended and undesirable effect, that is against the interest of the incentive makers. Perverse incentives by definition produce negative unintended consequences.

Most recently, I’ve used the term to describe the bizarre incentives created under the “No Child Left Behind” law (and the current “Race to the Top” program).  The problem here is that the intent of the law is to improve public education, but because the law focuses on a very narrow range of “easily-testable” subjects, it actually degrades public education.  Since the law “grades” schools and teachers based solely on standardized math and reading test scores, it creates a strong incentive to focus on the “tested aspects” of those two subjects, to the exclusion of all other curriculum.  The result is an increase in standardized test scores, but declines in performance under all other measures of educational quality or outcomes.

In the context of the “mortgage meltdown,” the employees of banks and mortgage brokerage firms were evaluated exclusively on the number or dollar value of mortgages issued, not on quality or any reasonable estimate of the financial results in “the long term” (at one time, we’d think that “the long term” meant the lifetime of the mortgages, but within the financial industry the term was reinterpreted to mean a period of ten years, then five years, then three years, and finally “a few quarters”).   Reckless agents who “played the game” (by issuing “no-doc” or “liar loans,” or even by fraudulently altering mortgage-application documents) earned huge fees (which they were never asked to repay, even after the federal government bailed out the industry). Many of their more ethical and honest colleagues earned less — or were fired for their “poor performance” and their unwillingness to join the “team effort.”

Of course, I’ve also encountered many perverse incentives in the “internet industry,” dating back to the reckless days when companies that had never earned any revenue (much less any profit) were rewarded with initial public offerings (IPOs) in which the company was was valued at billions of dollars.  Since investors were looking only for “the next new thing,” without considering any aspects of the company’s financial prospects, executives at internet firms abandoned “profit” or “revenue” as meaningful benchmarks, and instead looked toward other measures, such as “traffic” or “adviews,” sometimes assigning absurd values (for example, using valuations of $3 to $10 per “visitor” on a site whose traffic generated no income). Of course, if “visitors” were assigned a value of $10 each by Wall Street, then it seemed logical to spend millions of dollars to attract new visitors, even if the “new visitors” acquired for $5 each were very different from the earlier visitors to the site.  (In the end, many firms found that they couldn’t generate revenue to justify a value of even one cent per visitor.)

Historically, advertising agencies charged fees based on a percentage of the dollar amount spent on the advertising which the agencies bought.  If the agency could persuade the client to spend more on advertising, the agency’s fees increased, even if the advertising didn’t increase the client’s sales or profits.  Even after technology existed to monitor and evaluate the performance of internet advertising, many advertising agencies have continued to command fees based primarily on “amount spent,” providing no incentive to improve the effectiveness of advertising — nor even to seek out efficient ways to monitor performance.

I always resist “perverse incentives.” In the late 90′s, I refused to work for clients who succumbed to “perverse incentives,” and in the past decade, I’ve refused to work for clients who won’t set up systems to evaluate the performance of their advertising.  When I worked as a high-school teacher (briefly), I sought to teach what students needed to learn, without focusing exclusively on the subjects they’d be “tested on,” and I feel some regret about the classroom time that I spent preparing my sophomore students for the “High School Exit Exam.”  And I now realize that my unwillingness to accept “perverse incentives” was a big factor in my career decisions as an attorney.

Evaluating “performance” is usually a very complex and difficult task.  Too often, we seek shortcuts by focusing on a subset of the work being evaluated, and based on a subset of outcomes that are “easy to measure,” even if we all agree that the result doesn’t fairly consider all of the aspects of the work (nor even the aspects of the work we consider most important).

We create (or accept) the perverse incentives that create the perverse outcomes we detest.

But John Cassidy can make no such excuses for Dot.Con: The Greatest Story Ever Sold. Cassidy offers no insight, and even fails to identify the “con” promised by the book’s title. And his sloppy writing, riddled with factual and typographical errors, insures that the book can’t be accepted even as a “digest” of the events he reports.

The book’s eight-page prologue was mildly promising, and led me to expect a chonological report of the rise and fall of the “internet industry.”  I’ve never read any of Mr. Cassidy’s articles, but the book jacket assures that he is “one of the country’s leading business journalists” and “has been a staff writer at the New Yorker for six years.”  My expectations were low: I expected a competent journalist’s account of the stock market’s dot-com bubble. I was disappointed.

First, the book is riddled with mistakes: obvious typographical errors, embarassing spelling and grammatical mistakes, confusing shifts in time, and bizarre factual errors.  Clearly, this book somehow avoided the common year-long delay to publication (Cassidy discusses the impact of the September 11, 2001 terrorist attacks, in a book that reached bookstores during the first week of February 2002).  Apparently, time was saved by skipping all proofreading, editing, or fact-checking.

Cassidy’s first chapter attempts an impossible yet necessary task: recounting the entire histories of computing, the internet, and the “world wide web” in just 16 pages.  As I read this section, I was uncomfortable, because too much of what Cassidy wrote seemed incorrect. Then, I was jarred by a glaring mistake: Cassidy wrote that the Altair computer, released in 1975, was named “after a character in Star Wars.” (Like most Americans, I saw Star Wars during its first year-long run in theaters in 1977, and I recall no character named “Altair.” I do recall references to Altair as a star and solar system in the Star Trek TV series.) Perhaps my training as journalist and editor make me “more aware” of the book’s many spelling and grammatical errors, but finding such an obvious factual error on the fifth page of the first chapter made me quite anxious about the reliability of the rest of the book.

A few pages later, Cassidy writes: “In 1978, two Chicago students, Randy Seuss and Ward Christensen, invented the modem….”  As a long-time computer geek, I knew this was another mistake: programmers Seuss and Christensen didn’t invent the modem (which is a piece of computer hardware).  In 1977, Christensen wrote Xmodem, the first computer program used to transfer files between computers equipped with modems; a year later, he teamed with Seuss to create the first “bulletin board system” software.

After seeing such obvious mistakes in the book’s opening pages, I knew that Dot.Con would not be a reliable account of anything, but I read the book with the hope of gaining some insight into the stock market’s dot-com bubble.

Second, the book’s chronology keeps shifting: Dot.Con shifts between several modes. Some chapters appear to relate a chronological sequence of events. Other chapters focus on particular companies (Netscape, AOL, Amazon.com). Other chapters focus on broad themes.  Unfortunately, even the most “chronological” chapters don’t maintain a clear chronology, often including facts and events from earlier or later years.

Often, Cassidy’s “factual time-shifting” seems designed to make key events or statements look even more foolish. But usually, it simply confuses and distracts from the real absurdity.

Finally, the book offers no new insight: Nearly everything I read in Dot.Con, I had read somewhere else before.  Indeed, the book’s many footnotes credit nearly all of the book’s content to mainstream news articles and other books.  The main theme of the book is that the spectacular rise and fall of internet or dot-com companies in the stock market was a classic “speculative bubble,” no different from earlier absurd bubbles.  But hundreds of critics had been saying that since the mid-1990′s (and Cassidy cites many skilled analysts and brokers whose careers were ruined by their refusal to join in the feeding frenzy).

After I finished Dot.Con, I sought to identify a single fact or insight that seemed original to Cassidy, or even some fact or insight that hadn’t already been recounted many times before.

I can recall only one notion that I don’t recall reading elsewhere: the impact of Adam Smith’s concept of ”perfect competition” in an age when the internet reduces barriers to entry and removes friction from transactions. Cassidy writes: “In perfect competition, all goods sell at cost, and profits are zero.”  This insight helps us understand the folly of the recurring theme that because the internet is so big, it’s inevitable that internet companies which hold a “first mover advantage” or which capture millions of “eyeballs” will somehow earn huge profits from their vast audiences.  But Cassidy doesn’t seem very committed to this theory.

I expected that a book called ”Dot.Con” would name names: who were the con artists, and what were the confidence schemes?  Who was really to blame? Cassidy seems to waver, and I’m not sure if he intends to suggest that the dot-com crash was Alan Greenspan’s fault, or whether it was the fault of brokerage-firm analysts and of journalists — he seems to partially blame yet partially acquit each.  Or perhaps it was really all just an inevitable ”herd mentality” speculative bubble that was really nobody’s fault.

Certainly, Cassidy does an able job of reporting that the absurd valuation of internet companies was a major aberration for the analysts and investment bankers. He often repeats that the quest for fees and profits led many investment banks to seek ever-more-absurd valuation strategies, in order to float IPOs for companies with no history of profit or even revenue.  Over and over, he recounts the absurd financial figures for companies valued at billions of dollars despite short histories that promise only greater losses and virtually no prospect of profitability.  He finds lots of targets for ridicule, but they are all easy targets, and the stories have been reported many times before.

Cassidy never digs below the surface, and he mostly views the rise and fall of dot-com stocks as a single cycle, one giant wave that lifted and then sank.  He mostly ignores the flow of different “sub-industries” that may explain why the “bubble” continued for so long with several surges.  He ignores the impact of “buzzword investing” as venture capitalists and investors sought to stay one step ahead. (The buzzwords include: “Internet Service Providers”, “e-retailing” or “business-to-consumer,” “portals,” “business-to-business,” “Application Service Providers,” and “internet infrastructure,” each of which can be viewed as a separate “wave” — or perhaps as “more hot air” that delayed the collapse of the “bubble.”)

Maybe it’s too soon for anyone to write a definitive account of “the Internet Mania.”  And maybe John Cassidy did not want to assign blame, but instead to maintain the role of an impartial reporter of the various events, and the various theories. Whatever he intended, he did a poor job.  I don’t recommend Dot.Con.

The book is called “Dot.Bomb ” (beware, it’s one of two books released this fall with the same title). The full title is “Dot.Bomb: My Days and Nights at an Internet Goliath,” by J. David Kuo. (I decided to buy the book after reading a brief comment about it in the fall issue of Brill’s Content magazine.)

Dot Bomb chronicles the rise and fall of Value America, an internet retailer that went public in April 1999. The book starts in the middle: Kuo joined the company as an employee a month after its IPO, so his summary of pre-IPO events is quite condensed and incomplete (if my dot-com experiences are any guide, the pre-IPO times may have been more chaotic). Clearly, much of Kuo’s reporting about the first and last days of Value America comes from interviews with fellow Value America employees and investors, and I suspect the book lacks some perspective due to the apparent exclusion of input from anyone technical.

The book is extremely readable, perhaps the best-written non-fiction book I’ve read this year. (It’s definitely a better read than eBoys, a chronicle of activity at a venture capital firm that unfortunately went to press before the dot-com crash was complete; eBoys was the “must read” book I passed along to friends last year, and I strill strongly recommend that book also.)

Of course, I am biased: I have worked as a consultant for several dot-com startups over the past few years, and much of what I read sounded extremely familiar. I shook my head with understanding, and felt like a fellow insider, as I read about the absurd pressures that came from the artificial “internet economics” in which the experts claimed that capturing “revenue” or “customers” was more important than even a remote prospect of profitable operations.

In fairness, I was an early forecaster of Value America’s failure. My first internet-marketing consulting client (Bill Lederer at Art.com) referred one of Value America’s founders to hire me as a consultant, but after a single exchange of phone messages, I left a follow-up message telling the fellow at Value America that their venture sounded like a scam and I wanted nothing to do with it. That was my gut feeling (perhaps induced more from a chemical imbalance than from any genuine intuition), but after reading Kuo’s book, I’m glad I didn’t follow up, even if I might have made megabucks from the deal. (Of course, they might’ve rejected me on the next call, too.)

Kuo’s book isn’t just fascinating because of what it says about the dot-com craze and the irrational market forces that fueled irrational and schizophrenic actions by companies. It’s also a fascinating tale of a charismatic company founder whose greatest strengths are also his greatest weaknesses. It’s an insightful tale of human relationships in which people can’t tell ugly truths to their friends.

As I mentioned, Kuo is an excellent writer (or else has help from excellent editors).  I read the entire book in a single afternoon and evening.

Kuo’s report is certainly incomplete, due to his late entry into the company and his obvious reliance on reports from “fellow travelers” who apparently all shared his enthusiasm for the company (which seems almost cult-like). I’m sure some Value America insiders (perhaps all of them) feel mistreated by the account.  (More than a decade ago, I read another “rise and fall” book that I found inspiring: I can’t recall the title of the book by Neil Harris, who wrote then about his own similarly-traumatic experiences with Jack Tramiel at Commodore and Atari — where Harris’ jobs seemed quite analagous to Kuo’s roles at Value America.)

Kuo does a fair job of explaining why the insiders all clung to their dream: they all saw a single decision (belive or don’t believe in Value America) and two possible outcomes (success or failure). If we believe and fail, we have the adrenaline-pumping experience. If we believe and succeed, we have vast riches. But if we don’t believe, we have nothing. I found this to be a very rational explanation for irrational behavior. Oddly, since Kuo devotes a fair part of the book to discussions religious faith and prayer meetings among the company’s founders, I was surprised that he did not close the loop and expressly compare these people’s irrational faith in the “unknowable, unprovable” Value America to their faith in God and Christ.

While Kuo clearly reports (in relevant context) his conservative political background, as well as the Republican and Christian leanings of some of the people he writes about, I didn’t feel that these intruded or shaded his writing (and as a liberal democratic atheist, I’m pretty sensitive to such biases in the books I read).

In the end, Kuo does not insert any doctrine (religious, economic, or political) into his report about the rise and fall of Value America. He also makes clear that his knowledge is incomplete, and does not seem to try to reach to report on matters that are beyond the combined grasp of his own knowledge and his interview sources.

Anyone who has experienced the “dot-com” and “dot-bomb” business world should enjoy this book. Those who mocked the rise and fall of the dot-com culture will find the book quite validating. Even dot-com millionaires will likely still enjoy reading the book. And in the end, anyone who plans to start a business — on the internet or on Main Street — should read this book and at the end of each page, ask yourself, “is this me ?” (or “is this my boss?”).

– Mark J. Welch

The company’s original “affinity” notion of sharing a slice of sales with charities, turned into a business unit developing custom stores for charities.  Offered a potential “internet mall” page at FedEx, Value America’s CEO sought to persuade FedEx to create an entire internet retail store under the FedEx web site (the notion that FedEx would become its own customers’ competitor was ludicrous).  Potential marketing partnerships with Citibank and Visa, morphed in the CEO’s mind into vast financial-services businesses for Value America.  Another employee sought to shift Value America’s consumer retailing business into a business-to-business superstore, while others wanted Value America to simply become a service provider for other e-retailers.

These stories were familiar, because I have experienced them myself, as a consultant to e-commerce merchants.  I am sure the temptation exists for every business owner: the opportunities may seem boundless, or the grass may seem greener on the other side of the fence.  So the company that starts as a retailer, considers becoming a wholesaler.  As the company struggles and spends huge sums on custom software development, it seems obvious that all that work might be resold to others.  And every industry is covered by newsletters, magazines, or directories, which the newcomer may view as acquisition targets or as potential competitors.

On the good days, when the primary business seems to be on-track, my client will suggest that some new venture be “added” to the company’s portfolio.  All we have to do is task several people to this new idea, and then we’ll have a new profitable business unit. (Of course, we don’t have those people to spare, and we can’t hire enough new people for the core business, much less a new one, nor do we have funds to sustain the new business for the many months it will take to launch, nor do we have the infrastructure resources.)

On the bad days, when the primary business seems less promising, the client will propose that the old business model be abandoned, and all eyes focus on the new idea.  (Alas, the new idea is really a whole new business, which will require a substantial investment that’s not available, since the old business probably has debts exceeding equity.)

Of course, diversifying or expanding a successful business can often be a good idea.  And, if one business idea fails, it makes sense to shift many available resources to another, more promising idea.  The highest risk, however, exists when a “marginal” or “emerging” business, starts to make reckless bets on fringe ideas.

The “new idea” often seems to come from left field, and my own experience, as an “outsider,” is that most of these ideas can be quickly analyzed and “shot down.”

For example, more than one client has suggested buying or launching some kind of “publication” (whether in print or online).  The idea is to have an “independent” editorial vehicle that will help us get our message to potential customers.  Alas, if we own it, it’s not “independent” and it won’t be trusted, and if the existing publication earns its revenue from advertising, we must choose whether to “help” our competitors by carrying their ads, or forgo all advertising revenue in order to “capture” this enture channel.

Another common pair of ideas: “let’s become a wholesaler” or “let’s sell our experience developing our great e-commerce web site.”  In both cases, the client must worry about providing too much help to direct competitors, while also facing huge (usually insurmountable) expenses to re-align existing systems and staff to this new goal.  (If we can’t raise money to carry our business forward, it’s questionable how another company can raise funds to pay us to help them compete in the same market.)

Bottom line: Whenever I hear a client suggesting a “new direction,” I immediately focus on the old direction.  First, I ask the client what’s wrong with the original business idea. “You came to me 3 months ago and said you wanted to sell widgets, and you thought there was a substantial business in selling widgets over the internet at a fair price.  Was that idea wrong?  Has the market changed?”  The client usually stresses that the “old” idea is a good one, but will require more work and a longer “curve” (revenues, profits) than originally expected.  “Okay, then, you are saying you want to stay in the original business, and you recognize that you are stretched thin already.  How could it be better to start a new business unit, and create a huge new list of tasks to be completed?”

Often, the client points out that the “venture capitalists” are at fault.  “When we started, they wanted us to grab market share at all costs, spend ten bucks on advertising to generate a dollar in consumer sales.  Then they said, forget sales, build a ‘community’ where your customers fell comfortable.  Then they said, it’s all about advertising, put advertising banners on your site and find sponsors.  Then they said, it’s not about consumers any more, we want ‘business-to-business’ e-commerce, people who sell to businesses, that’s a bigger market.  Then they said, it’s not about selling products, it’s about creating and maintaining the ‘infrastructure’ for e-business.  Then they said, it’s about the infrastructure of the internet itself.  And then they stopped returning our calls, period.”

(In the end, I think my clients’ businesses are always about one simple thing: selling their products to customers, at fair prices, and making a net profit from those sales.  And I insist that my clients focus on that core business.)

– Mark J. Welch

I rarely recommend books to others.

Books are personal (like music and art films, it’s difficult to predict whether others will find your favorite book as life-altering as you did).

In the fall of 1998, I made an exception, and I strongly recommended that anyone planning to launch a web site business should absolutely, positively read the poorly-named StrikingItRich.com (by Jaclyn Easton).  That book offered no “unique insight,” but it did provide an extraordinarily well-written, engaging, and candid discussion of 23 “successful” website businesses (an updated paperback version is due in February 2000).  StrikingItRich.com was so well-written and captured so many ideas about creating new businesses on the internet, that I wrote: “This book should be required reading before launching a web-based business.”

Several weeks ago, a fellow Rotarian (Ron Rel of Foglight Software) enthusiastically recommended the book Blown to Bits by Philip Evans and Thomas S. Wurster.  I finally bought the book last week.

These guys actually get it. And thanks to this book, I feel as if I might just “get it,” too — I thank Evans & Wurster for helping me to finally understand some business practices that I have wrongly ridiculed  (as well as some other strategies that I have rightly ridiculed, but for some wrong reasons).

I now add Blown to Bits to my list of books that should be “required reading.“ This time it’s not just for people starting web businesses: anyone planning to operate a business (online or offline) must read this book.  I don’t care if you have a degree in economics, or if you have been president of a retail chain for fifteen years, nor if you have read and re-read both of the “internet economy” books co-authored by John Hagel (Net Gain , about “community,” and Net Worth, about “infomediaries”).  You must read Blown to Bits.

Blown to Bits is very well-written, especially when compared to Hagel & Armstrong’s Net Worth (which offers a harder-to-read and often quite different perspective on the same issues).  Blown to Bits is a book every business owner or manager should read.  I think Net Worth and Net Gain are only required reading for the most zealous netrepreneurs and those seeking to learn the strange internet vocabulary and grammar used by investment bankers and venture capitalists.

The authors of Blown to Bits are less prone than many internet-economy authors to making sweeping claims.  They readily acknowledge that one of the key features of the new economy is that even the most successful new player might actually still fail to make a profit, and remains vulnerable to other, newer players as well as retrenchment and new strategies from old competitors.

It’s hard for me to explain what the book is about: like the Rotarian who recommended it to me, I find that any words I use in recommending it seem inadequate.  (And although I think it’s well-written, it is definitely not a “quick read” — don’t try to read the whole thing on an airplane trip or even a long weekend. Sections that seem repetitive when skimmed, will prove more complex and nuanced when absorbed properly.)

At its simplest, Blown to Bits explains why so many of the new internet businesses are eschewing profits in favor of “eyeballs” and “relationships.”  It explains why that can make sense, while acknowledging that it could also result in a complete bust for the new players (and perhaps the old competitors also).

Stop reading my review.  Don’t waste your time reading reviews. Instead, buy Blown to Bits and read it, and when you are done, you will probably “get it,”  or at least you will have a better understanding of how the “New Economy” might work.

– Mark J. Welch

For those not familiar with PriceLine, it is a web site where consumers and business travelers can go and “bid” for airline trips or hotel rooms. Unlike traditional travel, however, you don’t bid on a specific flight or hotel (nor even for a specific airline or travel time), and you can’t ask to exclude specific vendors you might despise.

I have tried to use PriceLine several times to book travel.  Thus far, none of my bids have ever been accepted.  On many other occasions, I have considered using PriceLine but abandoned it because its “solution” is too limited to meet my needs.  For example, I want a rate for a trip to Hawaii, but I want to spend only $600 for airfare plus four nights of hotel accommodations.  Priceline will let me bid a specific dollar amount for airfare, and another specific amount for hotel (in two separate bids) — but if one bid succeeds and the other fails, I am locked in to half a travel package that I can’t use.

In addition, I might want to offer a bid that takes special requirements into account — for example, I’ll pay $50 more for a non-stop instead of a one-stop, and $20 per night more if the hotel is within two blocks from the beach in Waikiki. PriceLine doesn’t take any of these factors into account, and thus I suspect I will always get the worst possible arrangements within PriceLine’s specifications.

For business travel, I might need to be in New York by 1pm on Tuesday, but I can’t submit a bid for any travel that will get me to New York between 4pm Monday and 11am Tuesday — I must select a single calendar day to travel.

Personally, I hate to travel, and I also hate to deal with travel agents and airlines because I always feel as if I’m getting something less than the best deal. Since Priceline won’t let me start with a low bid and simply increment it by $20 until it’s accepted (and it takes 10 minutes or more to enter each new bid if you create a new ID and re-enter credit card data), I can’t feel comfortable about the company’s pricing: maybe I’ll still find that I paid $100 more than someone else who used Priceline to book the same flight.

Today, I noticed an ad (in Business 2.0) for another travel-sales web site called LastMinuteTravel.com.  When I read the ad, I was sure I had found what I was looking for: the ability to buy a complete travel package, just a few days before the departure date, and get a clear, fixed, and fair price quote.  I was wrong. LastMinuteTravel.com gives new meaning to the term ”virtual business.”

I went to LastMinuteTravel.com, selected “travel packages,” and found a fixed list of departure and destination locations.  While I found that I could depart from “San Francisco,” I discovered that no locations in Hawaii are listed as available destinations in the initial set of menus. I thought, my gosh, what kind of a “travel package” site would omit Hawaii?

After a few moments, I found an option for “more locations” at the bottom of the destination-city list.  While I found “Hawaii” listed as a type of package, I was given a plain-text entry box for the destination, which left me wondering if I should type Honolulu, Oahu, or Hawaii?  It turned out that it didn’t matter: there were no travel packages available to Hawaii.

What the heck, I thought, let’s see where I can go on a last-minute trip, even if Hawaii isn’t an option.  I searched for any available travel package departing from San Francisco to any destination at all, within the next seven days.  Results: no matches.  Fourteen days, then? No matches.

Finally, I asked LastMinuteTravel.com to list all trips departing from San Francisco to anywhere in the next 60 days.  It turned out that there were no travel packages available departing from San Francisco.

(LastMinuteTravel.com is based in Atlanta, Georgia.  When I asked to list any available trips from Atlanta to anywhere, during the next 60 days, the result was a list of trips only to two destinations: Mexico and France.  (Alas, I don’t have a passport.)

And, although the site’s motto is “no time is too late for Last Minute Travel,” the earliest listed trip departs in 11 days (December 22).

LastMinuteTravel.com should change its name to NoTravel.com.

– Mark J. Welch