good morning jake, you make some excellent points, we all need to take responsibility for our own trades...
interesting article on electronic component industry...
happy october by the way...
kathy :)
Partminer strikes it rich
By Matthew A. DeBellis
Redherring.com
October 1, 1999
The electronic components distribution market is heating up. For starters, New York-based Partminer this week received a 15 percent investment from technology magazine publisher Cahners Business Information, valued by insiders at $15 million.
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In signing the deal, Partminer, which runs an e-commerce Web site that matches buyers and sellers of electronic components, agrees to link products in its database to related articles from Cahners magazines and Web sites -- a handy feature for parts buyers.
"It raises the stakes in that niche," says Kevin Jones, president of Net Market Makers, an electronic marketing consultancy. "It validates that marketplace."
Business-to-business e-commerce is improving order fulfillment in many industries.
B2B companies are starting to rev up the IPO machine.
Venture capitalists are split on whether B2B or B2C is better.
The electronics component market is a $200 billion industry, Mr. Jones says. About a tenth of the market comes from "spot market" purchases, typically last-minute online buys by engineers. Those online sales are expected to grow at least 50 percent a year, up from a year and half ago when such transactions barely existed.
Publishers such as Cahners hope to use predicted growth like that to position their media properties as destinations for people who need products and information fast.
GROWTH PLANS
Partminer, founded last year by president and CEO Dan Nissanoff, is an offshoot of electronics component distributor Microcom Technologies (which Mr. Nissanoff also started). Partminer's B2B technology was created as a way to quickly search Microcom's inventory; the software is now offered as a free download.
Partminer hopes to expand its operations to include auto parts and computer peripherals over the next year. Although Partminer typically doesn't receive commissions on products bought and sold through its Web site, it charges fees for fulfilling those orders that can't be met by distributors or vendors. The company claims its Web site facilitates $780 million's worth of transactions a year. Half of those sales originate overseas.
Also jockeying for position in the B2B components market is Aspect Development (Nasdaq: ASDV). Last month, Aspect teamed with electronics distributors Arrow Electronics (NYSE: ARW) and Avnet (NYSE: AVT), and publisher CMP Media (since bought by Miller Freeman, a unit of United News & Media) to launch Chipcenter.
"We recognized that as publishers we engage customers at the beginning of the sales cycle," says Chipcenter CEO Girish Mhatre, former group publisher for CMP's electronics magazines. "Obviously, we couldn't do [it all] alone."
Completing failed orders can be a lucrative trade, says Tim Manahan, senior e-commerce analyst at the Aberdeen Group, a market research firm. He says that vendors are unable to fulfill 20 percent of online parts requests. Referring to the Partminer-Cahners relationship, he says, "It's a very good fit for a true, effective, business-to-business portal."
QUOTE ME
Content from Cahners's 17 electronics publications, including Electronic Business and Electronic News, are aggregated on a Cahners Web site where engineers will be able to buy components. On Partminer's portal, a free pricing program download and editorial content will appear alongside product information.
The technology Cahners will use, Electronic Commerce Free Trade Zone, was jointly developed by Partminer and IBM (NYSE: IBM).
By presenting news and reviews alongside components, publishing houses hope to create a greater "affinity" among readers, Cahners CEO Brian Nairn says. Cahners plans to make investments in and partner with B2B firms in other markets where it has publications, such as the manufacturing, travel, and retail industries, he says. Some partnerships could be nailed down by year's end.
Mr. Nairn says his company's investment in Partminer is a long-term business strategy. "In our mind, this is not an IPO play," he says.
IPO fever has struck companies similar to Partminer -- for example, Chipcenter is planning an initial public offering -- leading to speculation about a Partminer IPO. Mr. Nissanoff wouldn't comment on the possibility of taking the company public. |
