Last word on the Net -virtual bookshops are last word

After the collapse two years ago of the price-fixing Net Book Agreement, British booksellers are preparing for a price war in cyberspace against American competitors who do not have a single store in the country, nor any plans to open any.

Dillons and Waterstone's are operating Internet web sites each offering more than 1 million titles, some at a discount, to fend off rivals in the United States. The result is likely to push book prices down, because fewer skilled staff are needed to run an Internet bookshop and overheads are lower: expensive stores are not required. Computers and a phone line, connected to a mail-order system, take their place, and can be located in cheap areas.

If the cyberstores were physical locations, they would be the largest in each chain, based on the number of books stocked. Dillons expects that when its site, The Book Pl@ce, opens on 12 September, it will get 100,000 visitors a month, compared to the 50,000 a month that a large store might see. It intends to offer 1.2 million titles at the site, available by mail order with a credit card.

Waterstone's already has a site which sells 1.4 million books, some at a discount, and sees 60,000 visitors a month. It has been running since October. "That's a lot more than any shop," said a spokesman. "And even our biggest shop, in Manchester, only stocks 125,000 titles."

Virtual bookshops emerged in the past couple of years with the advent in the US of Internet sites such as amazon.com, which has no physical counterpart, though its computers are based in Seattle.

It was floated on the New York Stock Exchange this year in a deal valuing it at $300m (pounds 187m), though it has only been operating since 1994 and has does not expect to make profit for two years. Other US publishers, such as Barnes and Noble, are also on the web.

The virtual bookshop, at www.amazon.com, offers immediate ordering, and secure credit-card payment. Dillons and Waterstone's reacted by putting their own brand names and title range on the web.