Portal deals don't drive many sales, Jupiter says

While e-commerce sites may see heavy traffic from portal sites, they are overestimating the revenue that can be generated from portal agreements, according to a report released on Tuesday by Jupiter Communications.

Online commerce derived directly from primary portals will grow a bit, from 18% in 1999 to 20% by 2002, Jupiter said.

According to the report, 92% of e-commerce executives with portal deals said these deals help drive sales. But more than 60% who participated in the Jupiter survey said those deals account for less than one-third of total online sales. Only 5% of the executives said they are highly likely to renew their existing agreements, the New York-based research firm said.

The problem is e-commerce players haven't demanded enough from their portal partners, the report said. These portals offer ways to drive traffic, but not retain customers. In order to stem the loss of customers, portals will have to develop "compelling loyalty programs" to deliver repeat purchases for e-commerce partners, or risk losing huge tenancy deals, Jupiter added.

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