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At the risk of stating the obvious, the Internet poses a very real competitive threat to many businesses that are slow to grasp its implications and harness its possibilities.

In industry after industry, a few companies are making a great leap of faith and trying to develop new ways of reaching customers via the Internet, while others sit back and pooh-pooh this newfangled technology. Nowhere is this more true than in industries that rely on intermediaries to market their products, such as the insurance industry.

For an illustration of the Internet's power, consider the bookselling industry, which I believe will have obvious parallels to the insurance industry.

Book publishers have long relied on retail book stores to distribute their products. For years, many of us shopped in small neighborhood bookstores, which were conveniently located, offered customer service and generally had what we wanted.

Then came the megastores -- the Borders, the Crowns and the Barnes & Nobles, giant bookstores that bought in bulk and could stock a much broader selection than the neighborhood stores could afford. While they may not be as conveniently located in our neighborhood, their enormous purchasing clout gave them an edge with the publishers, giving them a better selection of products and lower prices.

In time, the competition proved too much. The small bookstores couldn't match the selling power of the big stores and were not given the same priority by the publishers. Shopping with the small bookstores became inconvenient.

Price wasn't the biggest issue; selection was. Sure, small stores had the best sellers and most popular titles, but they increasingly could not afford to stock alternatives or books with smaller press runs. Or, if the stores did, they purchased only one or two copies. Increasingly, shopping at the local bookstore meant special orders rather than finding a book on the shelf.

So many of us turned to the megastores. Yes, they were impersonal and light on knowledgeable customer service, but if the buyer knew what he or she was looking for, odds are they had it in stock among their tens of thousands of titles.

As a result, the neighborhood booksellers were either driven out of business or were forced to specialize in particular genres, rather than try to match the big stores for general selection.

Now, however, comes along a new bookselling animal courtesy of the Internet: is revolutionizing bookselling by delivering unparalleled convenience, with a selection that surpasses even the megastores. In addition, pricing is competitive not only because of volume but also because there is no retail operation to staff and, therefore, far lower expenses.

It's sweet revenge to some that the megastores are now facing serious competition from a new distributor -- that began with a computer and a garage -- to warehouse their books.

If the name of the game is delivering an impressive selection of products at low prices, and making shopping convenient, then is meeting customers' needs. And in doing so, has shown that an intermediary still can add value to the transaction. While book publishers could sell direct to the public via the Internet, why would a buyer want to browse multiple sites when one can bring them all together?

So, what about insurance?

What does the buyer of insurance value most? Is it having a personal relationship with a nearby agent or broker? Or is it being offered the broadest selection of products at competitive prices?

Just as in book buying, I think insurance buyers presented with a choice would opt for the latter.

Already, sites are sprouting up on the Internet designed to offer buyers convenient access to insurance products from a wide variety of companies. Take a look at and, for example.

Will traditional insurance agents and brokers make the leap to this new way of meeting customers' needs, or will we have another in the making?

Editor Paul D. Winston and Publisher and Editorial Director Kathryn J. McIntyre publish columns on alternate weeks.