Coming to a Web site near you:
One-stop shopping for shippers
Doubters say site's focus is too broad
BY HELEN ATKINSON
Journal of Commerce Staff
In the coming business world where e-commerce is going to be
dominated by business-to-business trading, one New York-based
company is trying to use Web technology to open a worldwide
business-to-business marketplace.
At the moment, ProNetLink (http://pronetlink.com) offers only the
ability to request proposals and bid for goods, but its plans call for
a single Web trading hub, where companies worldwide can agree
on contracts, pay invoices, arrange shipping and insurance
services and other business needs without a single handshake.
It's what ProNetLink Chairman Glen Zagoren calls "click'n'ship."
Zagoren says ProNetLink has more momentum than the average
Internet start-up because the idea stemmed from business, rather
than computers.
He sees the venture as a tool for doing business, not a technology
looking for a purpose.
"We're not a bunch of 20-year-old Internet whiz kids," he said.
"We're middle-aged guys who know how to do business," he said.
Keeping it simple
Zagoren, who was part of the team that introduced CD technology
for Sony Music, wants customers to think of ProNetLink as a safe
place in the World Wide Web.
"As the number of Web sites increases, so does the complexity
and difficulty of sourcing materials," he explained. "We take all the
information that exists out there on the Web and put it onto our
site."
While business-to-business e-commerce is in its infancy, analysts
agree it will overtake retail trading in the next three years. Forrester
Research in Cambridge, Mass., says that business-to-business
e-commerce will reach $1.3 trillion by 2003, and that it will make up
the majority of e-commerce overall.
Too broad?
Zagoren says ProNetLink will distinguish itself in that market by the
international scope of the information it gathers and makes
available, as well as the services it will offer.
But it's precisely the broad nature of ProNetLink that may hamper
its progress, according to analysts.
Scott Latham, an analyst who tracks the market for AMR Research
in Boston, says the independent trading exchanges that are
making progress are ones that specialize in one industry, such as
ChemConnect (http://www.chemconnect.com) which caters
exclusively to the chemical industry.
"It's no good saying, 'We can help you trade between Boston and
Japan,' " Latham said. "The question is: What kind of domain
knowledge can you bring to the table?"
ProNetLink is not the only company aiming for a broad base of
member users.
Software giant Oracle Corp. last month announced plans to create
Oracle Exchange, described as an e-business procurement
community.
Another company, Trade Compass, Washington, offers a broad
database of contacts for companies seeking international trading
partners, but is not yet offering online trading capabilities between
those firms.
Another potential competitor for ProetLink is VerticalNet
(http://www.verticalnet.com), which offers 50 industries to choose
from, and then hosts a specialized trading community for each of
them.
Test draws 5,000 trials
ProNetLink says it has about 5,000 people trying a 60-day free
membership, and Zagoren says the site is attracting 400 new trial
members a week.
But the real push will come in September, when the company
begins to sell its $29-a-month service.
Meanwhile, analysts remain skeptical.
"It seems like the ones that are most successful in this space are
the ones where the business relationships are already
established," said Fern Halper, director of e-business strategies at
Hurwitz Group in Framingham, Mass.
She pointed to Advanced Manufacturing Online
(http://www.amoweb.com) an online trading network in Europe for
high-volume manufacturers. Defying analysts' predictions, it is
hosting trade worth $500 million a month.
In the case of amoweb.com, the manufacturers had trading
partners already, and simply shifted business to the Web, Halper
pointed out.
"It's not so much a case of 'If we build it, they will come,' " she
commented. "It's more that the successful trading networks are
leveraging off pre-existing relationships, or the company that hosts
the network already has a base of customers."
Bumpy stock ride
ProNetLink was launched in 1997 and went public that December.
The stock opened at 20 cents and stayed flat for months until the
company announced its plans, when it leapt to $2.
But the stock has generally languished at or below $2. It spiked in
value to $8 in April this year, when ProNetLink's current Web site
was launched, but has been falling ever since. The stock closed on
Wednesday at $1.84.
ProNetLink has been furiously building its database and contacts,
selecting the 3.2 million best-suited companies from the 50 million
files at the Dun & Bradstreet Corp., Murray Hill, N.J.
It also has been seeking out relationships with trade organizations
and chambers of commerce.
By September, Zagoren expects the service to be actively
promoted by several foreign chambers of commerce.
Other services
Various services will be phased in in September. ProNetLink will
allow users to send any document in an encrypted format, for an
additional fee, using UPS' Document Exchange technology.
Zagoren acknowledges that encrypted e-mail already is available
on the UPS Web site (http://www.ups.com).
ProNetLink, however, will embed the UPS facility in its own site, as
it will with other services.
That way, the customer will only have to fill in basic information,
such as name, address and shipping preferences once.
Meanwhile, the company says it is working with two international
banks, which it would not disclose, to establish a facility for
electronic letters of credit.
"It's our intention to have full transactions online before the end of
the year," Zagoren said.
Helen Atkinson can be reached at (212) 837-7134 or
hatkinson@mail.joc.com.
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