Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Gartner Group Inc. forecasts worldwide online holiday shopping revenue to surpass $19.5 billion this year, and while there are huge sales opportunities, many Web sites will fail to deliver their products. "After two online holiday buying seasons of lost orders, late deliveries and broken promises, consumers have little patience for late or lost orders and poor customer service," Geri Spieler, research director for Gartner's e-Business Services, said in a prepared statement. "Brick-and-mortar companies with online channels have some inventory availability advantages over Internet pure-plays, but the point is lost on a consumer who cannot get a question answered or find out where an order went. With the cost of customer acquisition ranging from $50 to $300 each, there is no room for profit without repeat purchases. Without customer loyalty, e-tailers will eventually fail to earn new business." Gartner says there are three major Web site problems that are driving consumers away. These problems are lack of product fulfillment information; poor customer-centric, intuitive site navigation; and a lack of reasonable, reliable shipping fees and delivery dates.