InformationWeek

So what's itBeat.com thinking? On May 15, this marketplace for selling copiers and fax machines launched an online news site and print magazine, with an initial press run of 41,000. Now, in addition to the 50 or so employees who look after itBeat's reverse-bid system for buying office equipment, the company's suburban Chicago headquarters includes a mininewsroom of five reporters and a handful of researchers who are busy cranking out lab reviews of Xerox machines and features on more general small-business issues such as how to deal with a disgruntled employee.

ItBeat (pronounced "it beat," not "IT beat") has joined a growing number of business-to-business sites that believes-market carnage notwithstanding-that producing original editorial content is an effective way to attract traffic, generate business leads, and even exploit underserved media niches.

"It really helps establish credibility with our targeted audience: the buyer," itBeat senior VP Rick Ponsi says. "In general, there's a void of trustworthy information in this $100 billion marketplace. It's a very push-sale type market, with the dealer salesman knocking on buyers' doors, and that's typically the only information the buyer gets."

The magazine and transaction service is being rolled out first in Portland, Ore., and anyone who registers on the company's Web site will receive a free print subscription automatically. Ponsi predicts advertisers will welcome a place to promote specific products such as printers and fax machines, rather than general brands such as Hitachi and Canon, but he's wary of scaring off readers by becoming too advertising heavy.

"We're not expecting [the magazine] to be a huge percentage of our revenue and profit stream," he says. "We're expecting it to basically sustain itself and at the same time not be a significant cost center for us."

That's easier said than done. "Trying to build good content in the glossy form of a magazine is very costly," says Alan Alper, analyst at the E-commerce market research firm Gomez Advisors. "It's difficult to master the sweet science of distribution and aesthetics [while] handling advertisers, managing supplementary revenue streams, etc. It's trial and error-mostly error."

On the other hand, Amazon.com would still be an E-tributary today if CEO Jeff Bezos had listened four years ago to management theory about sticking to his "core competency" of selling books online, rather than publishing reviews, creating a huge and entertaining community of like-minded readers, then repeating the formula for everything from lawn chairs to DVD players.

"The key goal in E-commerce is customer retention," says Susan Lacerra, managing director and senior E-commerce analyst for the Jefferies & Co. brokerage house in New York. "Content can help generate leads, so that's a valid concept. The question is, How do you get paid from it? There has to be a tangible result."

The dot-com shakeout has created a paradox for executives: How do you square the sudden need for fiscal sobriety with the still-valid pressure to dominate your market?

Money-losing content companies such as Salon.com-which said this month it would lay off 13 people and cut production costs 20%-have cooked up an ever-frantic set of business models, from memberships to radio broadcasting to publishing divisions, hoping to strike the right vein. Meanwhile, commerce companies have been expanding their content offerings, hiring unfamiliar newsroom-types to create magic-bullet content solutions that will somehow produce eye-popping ratings.

"In this new-media world, no one has the right solutions; we're all experimenting," says Marcia Parker, a former print journalist who in June left her job as assistant managing editor of Quicken.com, an information site by the maker of financial-planning software, to become a programming director for America Online.

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