Net earnings: E-commerce in 1997

As 1997 ends, Internet commerce experts are busy counting up how much consumers spent shopping on the Net. But the real e-commerce action this year came from businesses selling to each other. Two of the three top e-commerce sites derived the bulk of their income from selling to business customers.

Period," said Jerry Michalski, managing editor of EDVenture Holdings' Release 1.0 industry newsletter. "They are credible, making lots of money, everyone wants to be them, and it seems to be a sustainable business model on the Web."

Cisco expected to ring up $3 billion in networking equipment sales from its Web site, while Dell books $3 million per day in PCs orders from its site. Bookseller Amazon.com, targeted at the consumer market, has yet to turn a profit. But the site has successfully weathered a furious Web onslaught from real-world book chain Barnes & Noble.

Alone, Cisco's $3 billion in sales outstripped online consumer spending for the entire year, according to estimates from Jupiter Communications and Forrester Research.

Automating routine purchases of office supplies, business services, and other nonproduction material by going online was the business-side sweet spot. But even that couldn't save ex-Lotus chief Jim Manzi's Nets Incorporated, a business-to-business e-commerce venture that went bankrupt in May.

But Sybase cofounder Mark Hoffman saw an opportunity so lush that he exited the database firm altogether to run Commerce One, which sells software to customize catalogs for specific companies, then collects a transaction fee. December deals with enterprise software giant SAP and Microsoft brightened Hoffman's holidays.

"E-commerce solutions are more tightly integrated and more complete in terms of end-to-end solutions," said Giga Information Group analyst Erica Rugullies.

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posted by srikanth....july6