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February 25, 1999

DRUGSTORE.COM WEBSITE FALLS ILL ON LAUNCH DAY

By CBR Staff Writer

Drugstore.com Inc finally launched yesterday as the third or fourth supplier of drugs and health and beauty supplies over the web, but the one with the best domain name, pre-launch hype and celebrity investor, in the form of Amazon.com Inc, which revealed its had taken a 46% stake earlier this week. However, Drugstore.com had a few problems with its web site yesterday – we were unable to reach it for hours during the afternoon, eastern standard time, which the company put down to the high-level of traffic. Amazon placed an icon on its site yesterday taking visitors to Drugstore.com and it is surely only a matter of time before the two become one. It’s pharmacy department handles prescriptions in the same way mail order pharmacies currently do and the company has partnered with one of them in Texas to fill customers prescriptions. Both of its distributors are also in the Lone Star state. Prescriptions must be phoned or faxed into Drugstore.com by doctors before they can be filled. The Redmond, Washington- based company assures customers that their information is 100% secure – something nobody should promise on the web – and it has a strict policy against sharing or selling its customer’s information. It is split into five departments: health, beauty, wellness, personal care and pharmacy. Other drugstore web-based vendors include Soma, which started business online in January, and PlanetRx, which is slated to open within a few months. The ability to make prescriptions easier to fill, to search for products based on keywords, plus the relative physical anonymity of web-based sales looks set to undermine the physical retailers in much the same way as Amazon.com and web- based software retailers shook up those sectors.

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