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Abstract: Internet-based e-commerce will
skyrocket, but only companies that develop and implement entirely new
business models will succeed. That is one of the conclusions of the new
231-page study, Portals to Profit: E-Commerce Business Models and Enabling
Technologies, released by Datacomm Research
Company and Techvest International. "Traditional
business models will be replaced by new models based on electronic
information chains," said Michael Hentschel,
veteran venture capitalist and principal author of the report, who
identified and analyzed the 20 most significant Internet e-commerce
business models. "The Internet is the most efficient market ever
devised," he adds, "but the inexorable drive towards cost and
below-cost pricing will compel vendors to discover new paths to
profit." "This report demystifies Internet e-commerce," said
Ira Brodsky, President of Datacomm Research. "It
explains why sky-high Internet stock valuations are not, in general,
crazy," he adds, "and provides participants with a comprehensive
analysis of how to compete and win in the global, computerized
marketplace." Portals to Profit: E-Commerce Business Models and
Enabling Technologies includes an Executive
Summary identifying the key Internet e-commerce business and technology
trends. The section on Business Models evaluates existing and emerging
profit models, including conventional, competitive, niche and relational
models. The Technology section discusses the role of portals, vertical
hubs, meta-search programs, intelligent agents, and knowledge management
systems -- technologies behind what has become the world's largest,
fastest, and most automated market. The Implementation Strategies section
looks at the technology, marketing, and financial components of winning
business plans. The Opportunities section highlights the best candidates
for software, hardware, and services. The report also profiles dozens of
companies including Alta Vista, Amazon, AOL, Barnes & Noble, Buy.com,
Cisco, Dell Computer, DoubleClick, EBay, E*Trade,
Fidelity Investments, Gooitech, Intelliseek, Microsoft, Motorola, Priceline,
RealNetworks, Yahoo! and ZiaSun.
Additional conclusions found in Portals to Profit: E-Commerce Business
Models and Enabling Technologies: Wireless will extend e-commerce to
everywhere business transactions are conducted; high-speed access will
empower merchants and advertisers through new and richer content. Wireless
winners will include two-way paging, digital mobile telephone services, and
Teledesic, the McCaw/Gates
"Internet-in-the-sky" satellite network. High-speed access will
enable 3D representations, avatars, and virtual worlds for a more
compelling shopping experience. The best-capitalized portals and hubs will
pull ahead of the pack, using their stock market valuations to acquire
whatever technologies they need. But there will still be opportunities for
small "e-tailers" who add value by
helping customers find what they want. Thus, money and knowledge will
become interchangeable on the Internet. E-commerce will require new
business models, engendering much experimentation. Many businesses will
sell products at cost, making money off advertising, shipping and handling
charges, membership fees, cash flow, or other devices. Keiretsu-like
alliances will enable member sites to gain proximity to favorite
destinations and share traffic flow. Auction sites will evolve further, as
intelligent agents turn the entire Internet into a real-time auction. Mergers
of big portals, ISPs, and telecomm access providers will abound. Big
portals will emulate AOL's subscription model. High-speed access providers
will deliver new types of content to captive audiences. ISPs will be
assimilated, becoming less important as standalone entities. Foreign
portals will exploit temporary opportunities -- opportunities that will
gradually disappear as real-time translation software breaks down all
language barriers. Browsers are becoming commodities and, as such, largely
irrelevant to business differentiation. Meta-search technology will
undermine search engines used by leading portals. Personalization
technology will benefit buyers by enabling personal portals and sellers by
enabling more precision ad targeting. Search software suites with
intelligent agents will prove key to data and ad
relevancy. The network computer is dead, but the concept of servers renting
software to thin and even zero-footprint clients is not. Middleware will
establish bridges between Web servers and legacy systems. Web-based
enterprise resource planning (ERP) software will play a key role in
business-to-business e-commerce. Software will increasingly
migrate to the Internet.
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