InformationWeek.com

Welcome Guest. | Log In| Register | Membership Benefits

February 7, 2000

Business Booms For Specialized Web Marketplaces
Land, water, and bartering become the latest ventures in e-commerce

Related links:

Marketplace Maneuvers

Companies Invest In Business-To-Business Marketplaces

Send Us Your Feedback

ctivity is brisk among business-to-business Web marketplaces, the fastest-growing segment of E-commerce. Marketplaces are even springing up for online trading of basic commodities such as land and water. This week, Azurix Corp. will launch a marketplace for buying and selling water supplies in the western United States, and PennNet will open the Oil & Gas Journal Exchange for online auctions of oil-producing properties.

Also this week, BarterTrust Corp. will launch a site for trading goods and services across different industries. And next week RetailExchange.com, a marketplace where retailers can buy and sell excess inventory of apparel and other consumer goods, will debut.

Virtually every major industry has at least one online marketplace, and those transactions will account for $2.71 trillion, or 37% of all Internet business-to-business transactions, by 2004, according to Gartner Group projections.

"Marketplaces are definitely in the land-grab stage, and not all will survive, but many will," says Forrester Research analyst Steve Kafka.

Azurix and PennNet are aiming at highly fragmented, minimally automated industries in which transactions rely on traditional word-of-mouth and telephone relationships. "Our goal is a more efficient market with better available information and, therefore, better pricing," says David Pruner, senior VP of resource development and management for Water2Water Corp., the business unit established by Azurix to operate the Water2Water exchange. Azurix is a $700 million global water-related products and services company spun off last year by Enron Corp., which retained two-thirds ownership.

Water2Water will serve buyers such as municipal water districts and companies, as well as landowner sellers such as farmers and ranchers, in 12 states. Water2Water and PennNet's Oil & Gas Journal Exchange will use TradingDynamics Inc.'s online auction technology from Ariba Inc. PennNet will initially offer auctions only, but later will add features for online negotiations for larger properties and oil industry equipment. PennNet recently acquired a controlling interest in Ebco USA Inc., a leading provider of offline auctions of oil properties.

BarterTrust will launch with 8,000 companies, including Maytag and Herman Miller, offering everything from refrigerators to radio advertising spots to architectural services. BarterTrust members will sell goods or services for "BarterTrust dollars," which can be used to purchase other items on the site.

Barter is a $9 billion market in the United States, but it's not clear how much of that will move online. "We're in a wait-and-see mode," says Randy Stumpf, VP of Premiere Services Group in St. Louis, the barter-and-trade unit of Premier Radio Networks Inc. "We'll list products online and hope that because of the national presence, we'll get greater exposure to buyers."

Back to This Week's Issue
Send Us Your Feedback
Top of the Page