Main Street is no longer the place to set up a retail store. The Web is.

Whichever way you look at it, the Web has become the place for commerce.

Online spending grew 18% in March compared to last year -- the eighth consecutive month of double-digit growth, according to MasterCard Advisors' SpendingPulse. The growth rate has outpaced that of traditional brick-and-mortar stores. While many chain retailers' online sales are growing, their store sales are shrinking. At 41 of the 50 biggest retail chains in 2008, e-commerce revenue grew as store sales declined, says InternetRetailer.com.

For the longest time entrepreneurs wanting to venture off on their own would open a store downtown where foot traffic abounds. But that trend, it seems, is changing. Today's equivalent of foot traffic is eyeballs. Much of that traffic flows from search engines and mega-marketplaces such as Amazon.com ( AMZN - news - people ) and eBay ( EBAY - news - people ). Today an entrepreneur contemplating a retail business no longer leases space on Main Street. She opens a Web site. Her market is no longer local.

There is much discussion today about how we will reverse this recession and why entrepreneurs are a key piece of the puzzle. The U.S. Census reports that there are 19.5 million nonemployer firms -- mom-and-pops -- and a large portion of this segment operates retail stores. Another 4.5 million firms operate with less than 10 employees, a segment that is also heavy in retail. In this recession many of them have gone out of business.

For an economic recovery, the small, specialty retail segment will need to get back to a healthy state. E-commerce may be the answer. Evidence suggests many small online retailers are doing quite well.
Take FineArtAmerica.com, an online marketplace and social networking site for painters, photographers and other visual artists. Artists can use to the site to connect with collectors and other buyers and, says founder Sean Broihier, put the business side of their career on "autopilot," leaving them more time to create art. FineArtAmerica.com (FAA) has more than 28,000 artists who upload new images to the site each day; 6,000 of them offer prints for sale.

FAA has been profitable since launch in 2007, thanks in part to its low overhead. Founder Broihier is its solo owner, and the company has no employees. Revenues were $175,000 in 2008 and $1 million in 2009, and the company projects revenues of $2.5 million for 2010. Broihier says that FineArtAmerica.com currently attracts 175,000 unique visitors a day, and traffic is growing by 10%-15% a month.

Broihier is a very good example of someone who has taken destiny in his own hands by embracing the Web rather than joining the 10% unemployment pool in America. (See my post Deal Radar 2010: FineArtAmerica.)

Another entrepreneur, Jeff Taxdahl, founded Thread Logic in 2002 to create custom-logo-embroidered apparel for businesses and organizations. Products range from polo shirts to aprons to fleece blankets. In a business that has been slow to go online, Thread Logic has focused almost exclusively on Internet sales while keeping in close touch with customers. In 2009 sales were $1.1 million, up 27% over 2008. (See my post Deal Radar 2010: ThreadLogic.)

Will Apple's wonder gadget get more memory? Will it come in different colors? Who cares. A new processor is what it really needs.

Will the iPhone get more flash memory? Will it get new features, like a compass?

Who cares. What the iPhone really needs is a new processor. And there is no sign, yet, that it will get one.

Apple ( AAPL - news - people ) alluded to the problem in March, when it introduced new software for its smart phones. The reason it doesn't run more than one third-party application at a time, Scott Forstall, Apple's vice president for iPhone software development explained, is because such work will drain the battery too quickly.

It's more than just a power-management problem, however. "One of the drawbacks of the iPhone right now is it can only [run] one application at a time," says Will Strauss, president of wireless market research firm Forward Concepts. With a more powerful processor, he adds, the iPhone could run several applications concurrently.

Apple's rivals are already heading down that path. Palm is pushing out a new phone based around Texas Instrument's ( TXN - news - people ) OMAP3430 processor. One of the Pre's key features: the ability to show the user information from more than one application at a time. The software makes it slick, but TI's hardware makes that possible.

Apple, meanwhile, relies on an application processor from Samsung. There are two problems there. For starters, Samsung also sells smart phones, allowing it to give its phones the same capabilities, on paper, as Apple's iPhone. The bigger problem, however, is just about muscle. The relatively dinky processor can't match the TI model's power.

There are several possible solutions. Samsung could build a new processor around the same ARM Cortex-A8 architecture TI uses, or Apple could switch to TI, Strauss suggests. Alternatively, Apple could build a processor of its own, presumably one based on the ARM-architecture, with the chip designers it picked up last year with its acquisition of PA Semi (see "Apple Buys Chip Designer").

There are no signs that Apple is doing that--yet. Then again, if Apple were, it would likely keep such a move a very tightly guarded secret, because it would be the only information about its new phone that would really matter.

 

Rankings for the top 15 programs on cable networks as compiled by Nielsen Media Research for the week of March 2-8. Day and start time (EDT) are in parentheses:

1. "Burn Notice" (Thursday, 10 p.m.), USA, 4.44 million homes, 6094 million viewers.

2. "ICarly" (Saturday, 8 p.m.), Nickelodeon, 4.1 million homes, 6.29 million viewers.

3. "WWE Raw" (Monday, 10 p.m.), USA, 3.92 million homes, 5.76 million viewers.

4. "WWE Raw" (Monday, 9 p.m.), USA, 3.58 million homes, 5.25 million viewers.

5. "NCIS" (Monday, 7 p.m.), USA, 3.42 million homes, 4.67 million viewers.

6. "NCIS" (Monday, 8 p.m.), USA, 3.4 million homes, 4.5 million viewers.

Sony Corp. said Friday that Ryoji Chubachi is stepping down as president, and Howard Stringer, chairman and chief executive, will stay on, adding the presidency as another title.

The Japanese electronics and entertainment company, battered by the global slump and the strong yen, is projecting its first annual net loss in 14 years.

Sony (nyse: SNE - news - people ) said Chubachi will step down April 1. Further details weren't immediately available. But the Tokyo-based company said it is holding a news conference later Friday on new management, and Stringer will be there.

Chubachi, 61, oversees Sony's core electronics sector, at the center of the unfolding economic woes at one of Japan's most famous manufacturers. He became president in 2005, when Welsh-born American Stringer, 67, became the first foreigner to head Sony.

Both executives had promised a dramatic turnaround at Sony, the maker of Bravia flat-panel televisions, PlayStation 3 game machine and Cyber-shot digital cameras.

But the global slowdown - hitting during the key year-end shopping season - and the surging yen, which erodes foreign earnings, have proved too much. Sony is particularly vulnerable to overseas demand because exports make up about 80 percent of its sales.

Sony is expecting a 150 billion yen net loss for the fiscal year through March. That's a reversal from a net profit of 369.4 billion yen the previous year.

The last - and only - time Sony reported a loss, for the fiscal year ending March 1995, the red ink came from one-time losses in its movie division, marred by box office flops and lax cost controls.