Shifting from Buzz to Biz

By John BlackfordNow e-services are becoming products in their own right—like online software rental or Web consulting. In addition, more people than ever are selling things online.

By John Blackford

Now e-services are becoming products in their own right—like online software rental or Web consulting. In addition, more people than ever are selling things online. Amazon.com got things started in the products area with its zShops initiative. CEO Jeff Bezos figured that letting others sell products on Amazon would offer the convenience customers had already found buying books, CDs, and toys. Likewise, eBay created a business—worldwide individual auctions with its site—that turned everyone's attic into a warehouse of "collectibles." The marketing of services is about to kick into high gear.

As millions (soon billions) of Web users act as both buyers and sellers of products, and as services themselves become products for sale or rent, distinctions between buyer and seller are blurring somewhat. Your role as buyer or seller simply reflects what you are doing at that instant. One moment, you might be a book buyer; at another, a crafts seller; and at a third, a consultant.

Online, All The Time

As intelligent cell phones and PDAs get into mass distribution (see John Dvorak's column in this issue), the always-on potential of the Web will further blur roles. Cell-phone manufacturers are working on the capability to poll selected individuals for proximity: Walk past a Starbucks, and your phone can beep if a friend is inside. More to the point, it could also beep if one of your clients (or potential clients) is inside. As we become more connected, roles become more fluid, as do work schedules.

Because the Internet allowed individuals to get information conveniently, often for free, the number of users soon rose to mass-market levels. That in itself created the opportunity to market to those users, which created a different kind of critical mass—one that encourages businesses to sell to each other. The B2B opportunity is creating a third wave on the Internet (after the rise of Web usage and the birth of e-commerce). The underlying reason is simple: The Web really is a more efficient place to do business. Transactions can be completed quickly, with more options for the buyer, at lower cost.

Amazon's zShops and eBay's auctions empower individuals to market products to others. Likewise, as columnist Jim O'Brien notes in this issue, group-buying services like Accompany, Mercata, and Zwirl enable individuals to get volume discounts by aggregating their purchasing.

Where The Large Guys Roam

But the real power of B2B is at the other end of the scale, where mega-companies and industries use the efficiency of the Web to improve operations. Recently, industries including steel, automotive, oil, and retail have put together ways to integrate buying into the Web.

General Motors, Ford, and Daimler Chrysler AG have created an auto-parts auction network running on Oracle databases. This system will handle $250 billion in parts each year and is expected to lower the cost car makers pay for parts by at least 10 percent. Oracle is also working with retail giants Sears, Roebuck & Co. and Carrefour Supermarche SA to create a worldwide online exchange for retailers, a $3 trillion annual market.

Such partnerships between traditional and high-tech industries are just one piece of the B2B action. In addition, hosting, consulting, and service providers are helping businesses of all sizes to participate in the emerging Web economy. To date, though, help has been scarce for those marketing services rather than products. Startup Bigstop.com is specializing in just this area.

Things are changing so fast that partnerships are a must, and companies must continually ask what business they're really in. Web consultant USWeb/CKS, for example, ended 1999 by announcing a shift in the company's focus from helping companies create and integrate Internet sites toward hosting and managing Web infrastructure for clients. About.com is shifting from a specialized portal to one that offers targeted B2B services.

The changes are so swift that e-commerce and B2B operations are beginning to outstrip traditional economic controls. The Fed uses interest-rate limits to keep the economy from "overheating." However, when investors can see double- or triple-digit returns, paying a half a percent extra on borrowing may not have the intended deterrent effect.

The bottom line is, you can acquire products and information more effectively via the Web—and deliver products and information as well. Computer Shopper thus added its Biz-to-Biz section in March to help. Though our mission remains helping readers become better buyers, we'll offer support for those who also want to deliver their own products and services in the Web economy.

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