August 31, 2005, 12:00 AM

Overstock.com stocks up on new technology

In the second quarter, Overstock.com increased its spending on IT and e-commerce systems by 233% from the same period in 2004 as the online retailer takes on a variety of new projects from auctions to rebuilding certain parts of its web site.

Mark Brohan

Research Director

Overstock.com is stocking up on new technology as the company takes on and executes several major web site and systems improvements.

In the second quarter of 2005, Overstock, No. 19 in the Internet Retailer Top 400 Guide to Retail Web Sites, spent $6.1 million on information technology and related services, up 233% from $1.8 million for the same quarter in 2004. For the first half of 2005, technology spending was up 218% to $10.2 million from $3.2 million for the first six months of 2004.

Overstock is increasing its technology budget in order to implement several major systems and e-commerce platform upgrades. In addition to rebuilding the travel section of its web site, Overstock is also making further enhancements to its online auction, data warehouse and site search and analytics systems, the company says in its recently filed second quarter report with the Securities and Exchange Commission. “We have incurred a ‘stair-step’ increase in technology costs during 2005 in an effort to prepare us for the next growth period of our lifecycle,” Overstock says.

As befits a large online retailer with annual sales of about $500 million, Overstock runs a large technology platform and data center. Overstock uses XO Communications Inc., Qwest Communications International Inc. and MCI Inc. to connect to the Internet.

Overstock’s company and customer data is stored are on several Oracle 9i and 10g database clusters using Dell and IBM computers. The company also uses Dell PowerEdge servers for its web sites, which are connected to an Oracle database and operate in a multi-processing Linux environment, Overstock says.

 

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