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Technology Stocks : Internet Capital Group Inc. (ICGE) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (243)	8/9/1999 5:19:00 PM
From: Katherine Derbyshire	Read Replies (2) \| Respond to of 4187

If you look at Dell's e-commerce model, you will find that they count as "e-commerce" a sale in which the customer (individual or corporate) configures the system online then picks up the phone and calls in the order. The online configuration saves Dell a very significant amount of money--the cost of all the time the customer would otherwise have to spend pricing the system out on the phone. Likewise, Fedex claims that it saves something like $10 every time a customer uses the online tracking system rather than calling customer service to check on a package. Those are real, quantifiable, dollar savings, and they improve profit margins. Compare this to the margin-destroying price competition in the consumer space. In a lot of B2B purchases, the vendor's ability to support the product and supply information about the product (technical specs, chemical analysis, whatever) is far more important than price. The "market maker" parts of the ICGE portfolio attempt to facilitate the supplier-vendor interaction, thereby reducing costs and improving geographical reach for both the vendor and the purchaser. Time will tell whether the various ICGE companies have models that work--chances are some do and some don't--but the B2C experience doesn't strike me as terribly relevant. Re:infrastructure vs. market makers, I think ICGE (or any Internet B2B-oriented VC) has to invest in both. Some of the infrastructure plays will win big, some will die and vanish. Ditto the market makers. Investing in both improves the chance that you'll find a winner, IMO. Katherine Disclaimer: I am an employee and stockholder of VerticalNet, which is majority owned by ICGE. I am neither an employee nor a stockholder of ICGE.