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Once a Start-Ups' Graveyard, Business-to-Business Segment Of Internet Now Booming

Posted by TimSlavin at November 20, 2003

"Only a short time ago, business-to-business electronic commerce was in steep decline: Of the more than 2,000 Internet b-to-b start-ups that burst onto the scene from the beginning of 2000 to the end of 2001, only about one-third have survived, according to a study by Tim Laseter at the Darden Graduate School of Business Administration in Virginia. Yet today, b-to-b e-commerce is the largest piece of the Internet economy -- far larger than the businesses of eBay Inc., Yahoo Inc. and Amazon.com Inc.

The explanation: Most of the start-ups had hoped to profit by charging transaction fees on the billions of dollars traded between Old Economy businesses. But these brick-and-mortar targets, in many cases reluctant to allow new middlemen to take a cut of their transactions, rebuffed the start-ups and launched their own b-to-b initiatives -- often with great success." B2B online transaction volume in 2002 was $482 billion (up 242% from 2000) compared to $71 billion online transaction volume for consumers. Good piece from WSJ.com which requires paid subscription (sorry).

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