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A Year Ago: Online community gives rise to e-commerce

First published: Wed, 08 Jul 1998 17:21:18 GMT
Written by Kevin Jones, Contributor

The thesis of Net.Gain, a business trends best seller last year, was that virtual communities will lead to new and expanded markets. Until now, the idea has been better as food for thought than fodder for real businesses. But that may be about to change.

At least two companies, Tradecompass, which runs a reference site for international traders, and Questlink Technology, which operates a research site for semiconductor chip designers, are adding commerce capabilities to their sites to take advantage of the information-exchange communities they have built up over the past year. "This is an online community, but it's not like a casual, cool place to hang out," says Questlink Chief Executive Officer Mike Shultz of his company's site. "We're a pure business community for engineers; [we] help them in product selection." Both companies say their growing communities reflect the fact that they understand their respective industries and their users' information needs.

Questlink has quietly become a regular part of the research process for 150,000 of the 1 million American engineers who design chips for everything from toasters to PCs. Tradecompass, which aggregates 26 separate services for exporters and importers -- everything from country profiles to customsregulations -- is used regularly by nearly 10,000, with hundreds subscribing to its specialised services.

Having reached what it believes is critical mass in its community, Tradecompass is partnering with Sterling Commerce to provide a Web front end to traditional export value-added networks (VANs), which are used by the 200,000-plus registered exporters that can't afford to use VANs to submit bills of lading electronically or line up cargo space on a ship. "The small companies have been shut out of the VANs, but the Web levels the playing field," says George Atkinson, business development director at Tradecompass.

Tradecompass has bought Trade'ex Electronic Commerce Systems' Market Maker application to create an online market for subscribers to trade with each other.

Questlink has made its money from ads. Because its specialised search engines and other tools help engineers search through thousands of available chips for the one with the right qualities for a project, chip companies such as Fujitsu pay $40,000 (£25,000) per month to present their ads to their targeted buyers.

For the past four months, Questlink, through a homegrown commerce engine, also has allowed engineers to buy a sample of the chip they've selected to test.

Volume hit only $10,000 (£6,000) in March, with most transactions less than $100, but it's growing at 20 percent monthly, and the company expects to be profitable by year end.

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