"CIMA, thanks for the XNET Post: It's building up a LARGE B2B"
Faltering Web retailers are leaping into B2B. Great--they're just in time for the massacre.
B2Bluster
By Daniel Lyons
BEYOND.COM MADE ITS LIVING until recently selling software over the Internet. And a lousy living it was. Beyond.com lost $125 million on revenue of $117 million last year. Its shares have plummeted from $38 to $3 as investors fled so-called e-tailer stocks. Fighting to stay alive, the Santa Clara, Calif. company has a new plan: Instead of selling stuff over the Web, it will run electronic storefronts for other shops that want to sell stuff over the Web, taking a cut of their transactions. Never mind that its customers are in a business--e-tailing--so bad that Beyond.com quit it. The new strategy has one huge appeal: Beyond.com can now describe itself as a "business-to-business," or B2B, Internet company, thereby surfing the latest wave of Web madness. These days B2B companies are all the rage, just as B2-consumer sites were only a year ago.
So outlets like Beyond.com, MotherNature.com and Fatbrain.com are leaping to B2B like chimps swinging from vine to vine to stay ahead of a raging forest fire.
Shamelessly, others are invoking the B-word. In March of 1998 B2B was mentioned exactly once on the PRNewswire, the mouthpiece of corporate America; March 1999, a mere 14 times; this March B2B was touted 692 times. Hill & Knowlton launches a network for its flacks to stay in touch with clients and calls it a "collaborative business-to-business virtual work environment." Thomas Rogers, the ex-NBC honcho who now runs trade-rag publisher Primedia, sees Fire Chief magazine as a "powerful vehicle" for B2B because it matches buyers (fire chiefs) and sellers (makers of fire trucks). Ahem.
These hucksters are plunging into the B2B bath just as the plug is being pulled. Too many B2B firms are fighting over the same markets--and they are massively funded and, in many cases, ridiculously overvalued even after recent market declin
es. Merrill Lynch says a basket of ten B2B stocks is down 38% since February.
Some 600 online marketplaces in hundreds of industries have been launched, and more are announced each day. Each segment has room for maybe one or two major players, yet in health care 40 Web sites joust. In chemicals at least 50 sites compete, including CheMatch, ChemCross and Chemdex. ChemConnect shifted to B2B in July, racked up $127,000 in sales last year and lost $15 million; Goldman Sachs and Merrill Lynch are taking it public.
This madding crowd will have a tough time making B2B work. Building electronic links between suppliers and customers is tricky; luring customers is even trickier. The Web middleman's cut will decline as transactions grow. Worse yet, the B2B-ers could get crushed as big suppliers set up their own sites. The Big Three automakers, Boeing and Johnson & Johnson are doing just that.
"The problem is that 90% of the B2B stocks are overvalued and 10% are ridiculously underva
lued--and the challenge is to figure out which is which," says David Perry, chief of Ventro Corp. (formerly known as Chemdex), a B2Ber in Mountain View, Calif. In health care 40 sites will wither to maybe 10 this year, and to only 3 or 4 by the end of next year, he says. "There's an opportunity here to build a $100 billion company. Those that do are ridiculously cheap today. The others are worth zero."
The idea of using the Web for business
Date: Tue, 18 Apr 2000 22:07:40 -0400
X-MimeOLE: Produced By Microsoft MimeOLE V4.72.3110.3
Faltering Web retailers are leaping into B2B. Great--they're just in time
for the massacre. B2Bluster
By Daniel Lyons
Next page
BEYOND.COM MADE ITS LIVING until recently selling software over the
Internet. And a lousy living it was. Beyond.com lost $125 million on
revenue of $117 million last year. Its shares have plummeted from $38 to
$3 as investors fled so-called e-tailer stocks. Fighting to stay alive,
the Santa Clara, Calif. company has a new plan: Instead of selling stuff
over the Web, it will run electronic storefronts for other shops that want
to sell stuff over the Web, taking a cut of their transactions. Never mind
that its customers are in a business--e-tailing--so bad that Beyond.com
quit it. The new strategy has one huge appeal: Beyond.com can now describe
itself as a "business-to-business," or B2B, Internet company, thereby
surfing the latest wave of Web madness. These days B2B companies are all
the rage, just as B2-consumer sites were only a year ago. So outlets like
Beyond.com, MotherNature.com and Fatbrain.com are leaping to B2B like
chimps swinging from vine to vine to stay ahead of a raging forest fire.
Shamelessly, others are invoking the B-word. In March of 1998 B2B was
mentioned exactly once on the PRNewswire, the mouthpiece of corporate
America; March 1999, a mere 14 times; this March B2B was touted 692 times.
Hill & Knowlton launches a network for its flacks to stay in touch with
clients and calls it a "collaborative business-to-business virtual work
environment." Thomas Rogers, the ex-NBC honcho who now runs trade-rag
publisher Primedia, sees Fire Chief magazine as a "powerful vehicle" for
B2B because it matches buyers (fire chiefs) and sellers (makers of fire
trucks). Ahem.
These hucksters are plunging into the B2B bath just as the plug is being
pulled. Too many B2B firms are fighting over the same markets--and they
are massively funded and, in many cases, ridiculously overvalued even
after recent market declines. Merrill Lynch says a basket of ten B2B
stocks is down 38% since February.
Some 600 online marketplaces in hundreds of industries have been launched,
and more are announced each day. Each segment has room for maybe one or
two major players, yet in health care 40 Web sites joust. In chemicals at
least 50 sites compete, including CheMatch, ChemCross and Chemdex.
ChemConnect shifted to B2B in July, racked up $127,000 in sales last year
and lost $15 million; Goldman Sachs and Merrill Lynch are taking it
public.
This madding crowd will have a tough time making B2B work. Building
electronic links between suppliers and customers is tricky; luring
customers is even trickier. The Web middleman's cut will decline as
transactions grow. Worse yet, the B2B-ers could get crushed as big
suppliers set up their own sites. The Big Three automakers, Boeing and
Johnson & Johnson are doing just that.
"The problem is that 90% of the B2B stocks are overvalued and 10% are
ridiculously undervalued--and the challenge is to figure out which is
which," says David Perry, chief of Ventro Corp. (formerly known as
Chemdex), a B2Ber in Mountain View, Calif. In health care 40 sites will
wither to maybe 10 this year, and to only 3 or 4 by the end of next year,
he says. "There's an opportunity here to build a $100 billion company.
Those that do are ridiculously cheap today. The others are worth zero."
The idea of using the Web for business |
