Staples Invests In Web Access For Small Business

In a concerted effort to offer e-commerce solutions to small and medium-sized businesses, office supply superstore Staples, Inc. (Nasdaq: SPLS) announced Wednesday that it has invested a total of $9.5 million (US$) in two access providers.

The Framingham, Massachusetts-based chain of over 1,000 superstores invested $6 million in HotOffice Technologies, a Boca Raton, Florida-based Intranet service provider. Another $3.5 million was invested in DSL.net, a New Haven, Connecticut-based high-speed Internet access company.

In addition, Staples added that it has expressed interest in purchasing up to $5 million in common stock from DSL.net at its upcoming initial public offering.

The deals will apparently make use of cross-marketing initiatives, as both companies will be linked to the Staples home page and marketed to customers in retail stores throughout the United States, Canada and Europe.

The investments are viewed as Staples’ effort to offer low-priced e-commerce solutions to small to medium-sized businesses.

“The Internet has leveled the playing field for small businesses, who now have access to technology and information services that previously were out of their league in terms of price,” said Staples CEO Thomas Stemberg. “Staples is dedicated to being a one-stop e-commerce shop for small business, and by partnering with industry leaders like HotOffice and DSL.net, we will be able to deliver additional customer value.”

More For the Money

HotOffice provides document management, Web-based e-mail, group calendars, a group contact manager, bulletin boards, online conference rooms, a business resource center and other tools.

DSL.net provides high-speed data communication services via digital subscriber line technology. The company claims that the speed of Internet access — delivered through traditional copper telephone wires — is quicker and less costly than frame relay or other methods.

Staples has been pushing for lower-cost alternatives for its customers, particularly since re-launching its Web site in July. The company added a number of features on its site, including a clearance center for bargain-shoppers and a back-to-school section.

Staples also announced Wednesday that it posted revenues of $1.84 billion in the second quarter, up from $1.48 billion in the same period last year. The company opened 49 new retail stores and opened new markets in the Netherlands and Portugal during the quarter.

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