Big Name Enters Small Business

SAN FRANCISCO (06/08/2000) - Do small businesses need yet another Web portal?

Jake Winebaum thinks so. Late last year Winebaum's incubator, eCompanies, paid a headline-grabbing $7.5 million for the business.com URL.

This week Business.com began a phased rollout of the site. Business.com bill's itself as "the Web's first directory and search engine focused solely on the business Internet." Winebaum, who is CEO, hired a team of "more than 50 library science professionals with specific industry experience" to categorize business Web sites.

At present, the site features the business directory and a search engine. Over the next few weeks it will add news from more than 30 sources, including AP Business Wires, BusinessWire, Knight Ridder Tribune and Reuters, along with profiles of 57 industries and 10,000 companies. The aim is to integrate the data so that anyone searching within a narrow vertical industry will be able to find everything he or she needs quickly. There are also plans to add a product locator through Business.com's sister site, Change.com.

"We think that the Internet's going to change not just every company but every job," Winebaum says. "As a result, the business Internet will become part of everyone's daily ritual. The problem will be harnessing what will be a very chaotic environment. That's what we aim to do." The problem is, Business.com is entering a field that's already as crowded as a Tokyo subway car at rush hour.

Entrepreneur.com and other sites aimed at small businesses have been on the Web since 1996. Earlier this year, Yahoo announced plans to build a b-to-b directory, and America Online has teamed with PurchasePro.com, a procurement site, to build an electronic marketplace.

Winebaum acknowledges that Yahoo will be strong competition, but says he hopes it will be fighting too many battles on too many fronts to use its brand and deep pockets to crush Business.com. "We've got to build something better than anything out there, and then attract people," he says. That will be the hard part. Even though it isn't a b-to-b marketplace, Business.com will face competition from small-business electronic marketplaces, which are proliferating like dandelions in spring. Many marketplaces are adding services aimed at attracting and keeping small-business users. Onvia.com, which claims to have 300,000 registered accounts, enables small businesses to buy and sell products and services online and offers breaking news, expert advice and community features. Scott Lundstrom, VP of technology research at AMR Research, says Business.com will also face competition from existing vertical marketplaces that will try to recruit small businesses, and from niche players that will carve up the small-business market by industry.

"The verticalization of the b-to-b space happened very quickly for a good reason," he says. "Companies share the same suppliers, terminology and business rules. I think you'll see the same thing happen within horizontal marketplaces for small businesses." Winebaum is betting that people will use a business directory and search engine in addition to the products, services and information offered by vertical sites. "We're Switzerland," he says. "We're neutral. "If a vertical has great content, we'll send our customers there."

Assuming, of course, that it has customers.

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