From the News Desk

Middlemen shake up e-business models

That gem -- the dot-com site that the CEO is gushing about -- is losing its luster. You've developed a solid technical platform and tackled thorny business issues, such as how to avoid taking business away from your channel partners.

But no matter how functional it is, the Web site cannot remain the only star shining in your company's electronic-business universe.

Why? There are these things known as online trading communities -- also called independent trading exchanges -- that could blow open your product distribution and procurement strategy. These trading communities are taking on a life of their own and becoming the key power brokers in corporate value chains.

Alienating your channel partners may have been the fear in the first electronic-commerce wave, particularly in business-to-business. Now the danger is being ignored by industry intermediaries.

The reason for the rise of trading communities is simple: On the Internet it is not possible to be in too many places at once. As our Page One article by Geneva Sapp and Ephraim Schwartz spells out, high-flying e-commerce companies, such as Dell Computer and, see opportunities for selling to the business world via these exchanges. Meanwhile, vendors of complex products with well-entrenched distribution networks, such as General Motors, are partnering with consumer Internet companies to reach as many consumers as possible.

And the monster of all deals -- last week's America Online-Time Warner merger -- also looms over this issue. AOL is the online equivalent of the Mall of America, and if you've got a product to sell, that distribution channel is looking a lot more compelling today than it did two weeks ago. By marrying the transactions with content, the merged entity will be an online force to reckon with.

So when you firm up your strategy, you may want to polish your partner negotiating skills. And flexibility had better be one of your site's virtues.

Is your business expanding its electronic reach beyond your Web site?

Write to me at, or visit my forum at

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about America OnlineAOLbarnesandnoble.comDell ComputerHolden- General MotorsReckon AustraliaTime Warner

Show Comments