Among those considering Web sites, 69% of those surveyed say their main use of the Web would be for advertising. Also, 57% say their focus would be on implementing E-commerce strategies, and 46% say they would leverage the Web to compete with other companies. Only 11% of respondents say they would use the Web to communicate with employees. However, analysts say some of those attitudes are going to change due to the advantages of E-mail.

"In many ways, using the Web for communication beats using the telephone," says Rick Miller, senior analyst of the Internet strategies program at Cahners In-Stat Group. "E-mail can provide documented proof that a conversation or interaction took place, and Web-based E-mail lets consumers contact businesses directly through a Web site, saving the small-business owner valuable time and freeing up customer-service reps."

About 1.6 million small businesses have Web sites, and that figure is expected to rise to 1.7 million by next year, analysts say. But many of those companies will face new problems once they launch their Web sites.

It can be difficult for small companies to get placement on search engines. "There are so many Web sites now that when users type in what they're looking for, search engines put out all kinds of extraneous lists before they get to your business," says Arthur Jackson, founder of ClickBackBay.com, a real-estate listing service in Boston.

Dealing with search engines can be a real challenge, says Rob Lovell, MIS manager of Nationwide Homes Inc., a Martinsville, Va., builder of modular single-family homes. Lovell monitors search engines weekly to check on his company's position. "What's really frustrating is typing in a keyword and seeing pages and pages of information on one company. End users don't want to wade through all that to find the company they are looking for," he says.

Analysts say search engines can intimidate smaller companies. Many search engines charge for placement, says Miller. "How much they charge has always been a dirty secret, but it's safe to say that larger corporations always seem to show up first on search-engine result lists," he says.

Lovell says he still believes the Web can offer companies a tremendous opportunity for revenue growth. But, according to the survey, companies that aren't seeking to market products and services globally are still hesitant to invest in E-commerce. More than 40% of the survey's respondents say they don't have enough time or technically trained staff to implement and maintain a Web site on their own.

These companies are missing out on a chance to market not just globally, but throughout their home states and nationwide, says Gary Remy, president of Prodigy Biz. "The Web is a way to list your business so potential customers can find you," he says.

Listing your company on the Web is a more cost-effective way of communicating with customers, Remy says. Companies that once spent thousands of dollars annually printing brochures or placing ads in Yellow Pages can use the Web to provide more-targeted and cost-effective advertising.

But the Web alone may not be enough, says Miller. If small-business owners aren't getting the results they want from search engines, he suggests using traditional advertising and marketing tactics in conjunction with Web promotion.