Consumer sites sing a new song: B2B

SNOWBIRD, Utah, 07 March 2000 -- Internet companies from eBay to Buy.com that made their names as consumer-oriented Web sites are changing their tune - now they are all about business.
Written by ZDNet Staff, Contributor
SNOWBIRD, Utah, 07 March 2000 -- Internet companies from eBay to Buy.com that made their names as consumer-oriented Web sites are changing their tune - now they are all about business.

At the Chase H&Q (Chase Hambrecht & Quist) "Planet Wall Street" annual investor conference held at the Snowbird, Utah ski resort they are pitching a new message to investors: "No longer are we solely in the business of selling to consumers, but we are also chasing more lucrative deals with other businesses."

The shift in presentations comes as the stock market, increasingly, is favoring the shares of business-to-business Internet companies, where suppliers and corporate customers can exchange goods and services online. Business-to-business firms like Commerce One Inc and Ariba Inc have soared while retailers like Amazon.com Inc. have languished.

The business side of e-commerce is seen as more lucrative because it's ten times larger than the retail market and business consumers are less fickle than mall-hopping counterparts, making for much lower marketing costs and more stable revenue streams.

B2B: More than just a catchword
At the conference, companies are trying to convince investors that it's more than just a new catchword, but a new strategy they are undertaking. These companies, which a year ago were focused mainly on consumers, made a point Monday of playing up their business-to-business, or "B2B" properties.

"eBay Germany is experimenting with B2B in which small businesses can buy and sell goods," said eBay Chief Executive Meg Whitman.

"Even though we're looked at as B2C (business-to-consumer), a significant component of our business is B2B," Buy.com Chief Executive Greg Hawkins said.

An official for the online media site NBC Internet Inc. told investors that he saw a huge opportunity in the "business-to-small business" sector.

B2C to B2B to B2B2C?
Analysts comments distributed at the Chase Hambrecht & Quist conference noted that, "while many investors think of NBC Internet as a pure B2C concern, we believe that the company's recent acquisition of AllBusiness.com is just the first of many initiatives in the B2B space."

And BizRate.com, a company best known as a place where consumers can rate and read other reviews of online retailers, insisted that it was actually in the "business-to-business-to-consumer" market.

Why all the attention to labels? Likely because the same investors that last year were stampeding to buy business-to-consumer Internet companies now are pouring their money into the B2B sector. Several once high-flying consumer Internet stocks have hit plateaus or even nose-dived, while the B2B stocks are soaring. But it is not yet clear whether the recent emphasis by eBay and others on B2B is just a superficial change to please investors or a real shift in strategy.

Stuffed toys to corporate towers
eBay's Whitman said the company is trying out an "ebay Pro" site in Germany for trading between small businesses. She also shifted away from the portrayal of eBay as a place for small-time beanie baby traders, and emphasized that people had used the site to sell entire businesses.

Buy.com, a low-price retailer of electronics, books and other items, said it thinks it can improve profit margins by adding new categories that are relevant to the B2B sector.

Companies in general are starting to prepare for the time when dotcom and the Internet are such a part of mainstream business that the designation "Internet company" ceases to have much meaning, when all companies are wired.

Dropping the '.com'
Last week, even before the conference began, one of the hottest start-ups of the Internet era, Infospace.com, Inc, said it wanted to remove the ".com" from its corporate title because it is "no longer just an Internet company."

The designation was commonly used by companies operating business-to-consumer sites now out of favor with investors, while business-to-business Internet companies, now more popular in the stock market, often don't use the suffix.

But Infospace wasn't changing its title because of an underperforming stock price. It's climbed 1,400 percent since it went public last year and is now valued at $23 billion.

Instead, it said, "Dropping the ".com" from our name will more accurately reflect our true business model of making every space an InfoSpace."

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