Brendan says the Internet is putting companies out of business, thank God. I agree with his premise that an Internet provides certain advantages, but I really think this is a supplement, rather than a replacement, for their B&M presence.
Perhaps the best example of this is Barnes & Noble. If I order a book on their site before noon, they will deliver it for free on the same day (within Manhattan). Think about this: I can order a book with my web browser in the morning and it will be waiting for me when I get home.
By contrast, the best Amazon can do is next-day service, and it's going to cost a hell of a lot more than free. For example, Amazon tells me that a new hardcover bestseller that costs $16.77 would cost $16.48 to ship next day. Even with Amazon Prime (which I'm trying to sign up for - I accidentally cancelled and my membership has been "pending cancellation" for over a week now), there's still a $3.99 surcharge in addition to the membership fee, not to mention the fact that it is still next-day service.
Another example is Best Buy and Circuit City - both allow you to order something online and then pick it up same day in the store.
This is also the reason I think that Blockbuster and/or Wal-mart will eventually displace NetFlix. As Blockbuster has already showed, they can easily adopt these new models. The difference is that they also have a large B&M presence that NetFlix will never have.
The real advantage comes from tightly integrating these two presences. Each should leverage the other.