No singing the blues at Bluelight.com

Bluelight.com LLC may have taken a bumpy ride along with the rest of the online retail industry during the past year, but the company's CTO, Patrick Chan, says that he is unfazed.

"I'm still focused where I want to be -- on the technology," Chan says.

BlueLight.com was created in late 1999 as a separate Internet shopping site by Kmart Corp., playing off the idea of the retail giant's well-known "bluelight special," after a poll revealed that fewer than one in 10 of its brick-and-mortar customers had been to the original Kmart.com Web site. In May 2001, as the overall online consumer market hit a snag and BlueLight.com's sales growth slowed, Kmart decided to coordinate marketing and merchandising duties through the parent company.

For San Francisco-based BlueLight.com, which attracted more than 9 million users during the 2000 holiday season and now boasts more than 7 million subscribers to its Internet service, the reorganization meant tighter coordination with Kmart but not major changes in technology focus, Chan says.

"The engineering is essentially what it was [before the rollback]," Chan says. "What has happened is the list of projects was slightly reprioritized. There's a little more focus on integration efforts and less on some enhancements we were working on like cosmetic things [on the site]."

The shift follows changes in the online retail industry this year as Disney reined in its Web spin-off, and Staples Inc. withdrew the tracking stock of its online counterpart.

"This is part of a widespread trend of pulling Web operations back in-house to be part of a more traditional corporate structure," says Randy Covill, senior analyst at AMR Research, in Boston. "Companies with multiple channels have won," he says, and pure-play dot-coms have struggled to implement successful business plans.

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