Keeping Score

No one wants to be just a number - until theres a ranking, then everyone wants to be No. 1. Corporate America is no different. This year, some of nations largest and most admired companies lined up to be numbered among the Interactive 500, Interactive Weeks annual ranking of the New Economys biggest and best.

Information technology giants Intel, IBM and Cisco Systems again topped the list. Intel, No. 1 for the second straight year, is now doing the majority of its business - almost $24 billion in sales - over the Net. Other high-tech titans, including Hewlett-Packard, National Semiconductor and Oracle, entered the upper tier of the Interactive 500. But while the builders and architects of the online economys infrastructure took many of the top spots on the list - which is based on the amount of revenue a company generates from its Web operations - many stalwarts of the Old Economy made impressive debuts.

The addition to the Interactive 500 of brick-and-mortar powerhouses Federated Department Stores, General Electric, Southwest Airlines, Staples and others underscores the market dynamics changing the face of e-commerce. No longer are dot-coms with big plans - and even bigger losses - driving the market. Now its the more traditional firms - the established retailers, manufacturers and services companies - fueling the engines of the Internet business machine.

This year, of the top 100 companies in the ranking, fewer than 30 had online origins. And of the top 25, only three companies started out on the Web. Those 22 brick-and-clicks are among the most successful companies on the Web, with some downloading sales in excess of $1 billion.

All told, this years Interactive 500 pulled in a jaw-dropping $183.56 billion in online revenue - $100 billion more than last year - giving testament to the solidity of the Internet as a business platform.

Even so, as dot-coms continue to fall like autumn leaves, theres a sense that the e-conomy is in a backslide. A report issued Oct. 30 by International Data Corp. states that despite expected e-tail spending this quarter of more than $12 billion, online retailers will struggle for profits. According to the research company, unprofitable e-tailers will lose $700 million for the three-month period, while money-making firms will turn a combined profit of a modest $500 million.

A continued shakeout in the sector is expected, which likely will lead to more headlines about eek-commerce, dot-bombs and dot-gones.

But e-tailers are only one segment of a much larger online marketplace. The overall Internet-based economy will continue to skyrocket, with Forrester Research predicting that worldwide Net commerce - both business-to-business (B2B) and business-to-consumer - will hit $6.8 trillion in 2004. The U.S. will continue to lead the global e-commerce market with online sales in 2004 of $3.2 trillion, according to Forrester.

David Cooperstein, in fact, says he and other analysts at Forrester believed this would be the year traditional firms found success on the Web. The brick-and-mortars, he says, "will come to dominate the Web."