Brick-and-Mortar Stores Want Respect

LAS VEGAS (05/23/2000) - The air conditioning at the Las Vegas Hilton Convention Center was set on chilly Monday, but feelings about the Internet among attending shopping-center developers, designers and investors ran hot and cold. Dallas Mayor Ronald Kirk, a member of the U.S. Federal Advisory Commission of Electronic Commerce, and New York Times correspondent Thomas Friedman offered anecdotes on how technology has affected the brick-and-mortar world, like it or not.

"We [the brick-and-mortar shopping centers] have been cast as the villains, and [Congress] has forgotten who their friends are," Kirk announced before thousands at the International Council of Shopping Centers.

Kirk gave an update on the House Judiciary Committee's recent decision to extend the moratorium on taxes for online purchases for another five years.

According to Kirk, state and local governments potentially lose more than $50 billion in revenue because they lack an Internet tax policy and because the current debate on Capitol Hill has become "more politics than policy." He encouraged the attendees to send handwritten letters to their congressional representatives to express their concern about the "unequal treatment" of brick-and-mortar stores.

The spotlight then turned to former foreign affairs correspondent Thomas Friedman, who talked about the killer "d's" of the Internet - democratization and demonization. According to Friedman, the post-Cold War society is now defined by "how fast your modem is," not "how fast your missile is." But for all the innovation that technology may bring, he also warned of its dangers.

"We are all increasingly connected and nobody's quite in charge," said Friedman, who referred to the recent "ILoveYou" virus as an example of how technology has "super-empowered" the little guy. "The big threat comes from Little Brother," he warned. He illustrated the drawbacks of a technology-driven world with a story about how he convinced an Israeli hotel manager to let him into his room by revealing the ages of his two daughters, which were stored in the hotel's computer from Friedman's previous visit. Friedman, author of The Lexus and the Olive Tree, also emphasized the inevitable globalization effect that technology has had on both government and business.

"Globalization isn't a trend or a Nintendo game -- when walls fall [because of the Web] we are in each other's business," Friedman said. Perhaps to appease the anxious audience members who were not sure what to make of his mixed feelings about the Net, Friedman said that consumers would get fed up with the pitfalls of the Web and return to brick-and-mortar operations.

Advised Friedman, "Don't get caught up in the b-to-s [bullshit]. If you applied the rules of the Internet, where there is no privacy or regulation, to the real world, you'd laugh."

And laugh they may. General Growth Properties, the nation's second-largest shopping mall owner, has weathered the market's turbulence of late, closing at $32.50 on Monday, more than 15 percent below its 52-week high, while networking-equipment maker Cisco Systems Inc. closed at $55.25, nearly 33 percent below its 52-week high.

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