More Opportunities to Reach Buyers

Web site extracts insights from information to facilitate purchases.

Corporate IT buyers are getting a new venue from which to procure equipment and other goods that has a familiar ring to it. Yahoo Inc. has launched Yahoo Industry Marketplaces, which, like the Santa Clara, Calif., companys consumer portal, will provide news and product information.

Whats new for IT professionals is the capability to turn the insight gleaned from such information into purchases.

Yahoo Industry Marketplaces, launched earlier this month, features a procurement site co-branded with USBid Inc., a Melbourne, Fla., online exchange for electronic components. Users can search, browse, bid for and purchase more than 4 million products from more than 500 sellers, such as computer hardware maker Compaq Computer Corp.

The Yahoo marketplace also offers a directory of 20,000 IT software products and services from Atlanta-based KnowledgeStorm Inc. The online directory connects 4,000 registered IT buyers with 3,500 registered vendors through a searchable database.

Other partners contributing to the e-marketplace include Thomas Register of American Manufacturers, in New York, which brings in suppliers of industrial products and services from a directory of 168,000 U.S. and Canadian manufacturers; Boston-based Bitpipe Inc., which offers a searchable database of white papers and case studies from hardware and software vendors and analysts; and International Data Group Inc., of Framingham, Mass., and New York-based Cahners Business Information, both of which provide IT news, feature stories and product reviews.

Unlike many other market exchanges, Yahoo has years of experience aggregating, organizing and presenting data to buyers. Some buyers, such as Carlos Gonzalez, already use Yahoo, so having the exchange at Yahoos site will make it easier to buy.

Gonzalez, general territory sales manager at Quantum Business Engineering Inc., a Hato Rey, Puerto Rico, computer hardware and software reseller and integrator, uses, and to research and buy applications for customers.

Before the arrival of Yahoo Industry Marketplaces, "I would still get results but not targeted results, so Id have to start screen layers of them and then make many calls or [send] e-mails to get what [I needed]," Gonzalez said. With the new marketplace, "were getting a more organized way of handling product information," he said.

Because the Yahoo portal provides a natural draw for so many potential buyers, some sellers see it as a good spot to not only disseminate company information, but also to directly sell to smaller buyers that they wouldnt otherwise reach.

Dave Young, director of Americas marketing at Tivoli Systems Inc., which sells systems and network management products on KnowledgeStorm, views the new Yahoo marketplace as an opportunity to reach the middle market.

In addition to the portals being cost-effective, Young hopes the number of sales leads will increase on Yahoo. "Our volume [on KnowledgeStorm] is not high, but the quality of the leads has been good," said Young, in Austin, Texas.

Yahoo Industry Marketplaces, which is free to product researchers and buyers, will be supported by advertising, sponsorships and purchase transaction fees. For some observers, this presents a difficult business model. Over the last quarter, officials at numerous business-to-business e-marketplaces have said they are finding it nearly impossible to make enough money simply through per-transaction fees.

In addition, many dot-coms and other businesses that depend on sales of Internet advertising have been cutting back staff or going out of business.

Yahoo, itself, while reporting a profit that exceeded $80 million in the fourth quarter of last year, told analysts earlier this month that its 2001 profits would be much lower than anticipated. However, there are those who believe that aggregating buyers in a portal and charging suppliers access to that buyer pool still make sense.

Microsoft Corp., of Redmond, Wash., said last week its bCentral small-business portal will participate in e-marketplace infrastructure maker Ariba Inc.s Supplier Hub Alliance.

The deal will offer suppliers of all sorts of goods the ability to connect to bCentrals aggregation of small-business buyers through the Ariba Commerce Network.

MobShop Inc. is peddling software to attract buyers into groups that can be targeted by suppliers, much as Yahoo is. The San Francisco-based company in March or April will unveil a version of its DemandSuite Exchange hosted software that can run on its own in the enterprise.

The upgrade will have a Java-based architecture and have more intelligence in the core engine to create the best value for buyers and sellers in terms of price, service, product characteristics and warranty, according to MobShop CEO Jim Rose.

"Demand aggregation is ... the key driver for increased transactions [and] revenue," said Paul Rider, vice president of product development at WHN Exchange.

The Marina del Rey, Calif., company this month licensed DemandSuite Exchange.

"[Its] an opportunity for smaller retailers to get access to product by avoiding high minimum order quantities [from manufacturers] and, at the same time, getting the volume/competitive price proposition as well."