E-businesses up, stocks down

Several positive economic developments pushed the E-Business Barometer up 26 percent in June. Dot-com-related job cuts fell to their lowest levels since November 2000 and the dollar value of merger-and-acquisition activity involving Internet companies doubled to US$6.0 billion from May.

Yet e-business stocks ended down slightly in June, even as the number of unique Web visitors in the United States topped the 90 million mark for the first time.

The E-Business Barometer gauges the health and direction of the e-business economy month by month, focusing on one segment of e-business. This month we look at the broadband market.

Major business-to-business deals and developmentsThe Web-based IT services market received a boost from IBM Corp. as Big Blue announced the Virtual Help Desk, an electronic self-service system targeted at enterprises with more than 10,000 users. IBM says Virtual Help Desk uses automated diagnostics to route problem inquiries to a Web portal, thereby reducing end-user support calls.

Compaq Computer Corp. announced plans to market an environmental compliance information system to state government agencies. Called eFACTS, the online database would be used to track activities such as environmental inspections and permit reviews and make the information available to the public.

BroadVision opened up its B2B Gateway, with Xerox already signed on as its first customer. The platform is designed to provide an integrated trading network where information can be exchanged from back-end systems to dynamic Web sites.

Many firms specializing in e-business software continued to struggle last month. B-to-b software company Ariba, for example, reported a net quarterly loss of $273.5 million, and Larry Mueller resigned after just 11 weeks as its CEO. Commerce One also announced a staggering net loss of $2.07 billion for the quarter as a slew of companies shifted online trading activities from public exchanges to private ones.

Recent broadband and e-business researchIncreased broadband Internet access could benefit the U.S. economy by as much as $520 billion annually, according to a report by Criterion Economics. The study concludes high broadband usage would stimulate subscription, network access, and computer equipment revenues, as well as increase consumer online shopping and entertainment expenditures.

Cahners In-Stat Group spotlights another market poised to benefit from increased high-speed Internet access: consumer broadband security. In-Stat says that revenues in that market will leap from $74 million in 2000 to more than $800 million by 2005, buoyed by strong sales in the firewall category.

Meanwhile, the collaborative planning and scheduling business is ready to take off, according to an ARC Advisory Group study. The report says the market for supply-chain planning and scheduling grew by 75 percent last year to almost $2 billion and will surpass the $5 billion mark in 2005.

Americans spent $556 million in online auctions in June, a new one-month record, according to Nielsen//NetRatings. EBay continued to dominate, accounting for 64 percent of online auction revenues.

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