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Web
Sites Targeting Small Businesses Gaining Prominence
The online business center (OBC) market has blossomed
over the past six months and the major players are well
positioned to transform themselves into indispensable
sites for small businesses, according to a report by Cahners
In-Stat Group. OBCs are Web sites that offer smaller firms
editorial content, interactive features, software applications,
and-increasingly-strategic business functions such as
online purchasing and sales.
Because of the value these sites provide, Cahners In-Stat
Group believes that OBCs will emerge as a key channel
to reach small business customers. Both the number of
OBCs and the quality of their offerings are on the rise.
"When we first looked at OBCs in June 1999, few of them
were offering interactive features," says Kneko Burney,
director of markets and computing for Cahners In-Stat
Group. "Now, of the 29 companies we studied, 15 of them
have serious plans to become online business spaces with
interactive functions."
Not surprisingly, the competition is heating up among
OBCs and the rules are changing. Providing pure editorial
content is no longer enough to attract and retain users,
no matter how good the content is, Burney says. To answer
that challenge, OBCs are offering or plan to offer the
following features: advice on creating marketing plans,
guided interactive discussions, market data statistics,
applications such as Microsoft Office for rent, and electronic
commerce functions such as office supply purchasing.
Over the next six months, OBCs will also offer more vertical
industry content. For example, many OBCs will unveil electronic
commerce features enabling small businesses to buy and
sell goods online. "An OBC might offer those in the baking
industry an online market for used ovens, for instance,"
Burney says.
Key players in the OBC market will spend millions on
marketing and advertising over the next six months. OBCs
will be both fighting for market share and spreading the
word about their market. Most won't emphasize the OBC
label, as it is too esoteric to resonate with potential
users. OBCs will use more accessible marketing strategies
such as slogans like "the place where small businesses
work," Burney says.
The potential market for OBCs is huge. With nearly two
million small businesses provisioning employees to access
the Internet, In-Stat estimates that over 20 million small
business employees are able to log on at work. Another
13 million in the small office/home office (SOHO) market
use the Internet and are also potential customers.
In-Stat ranked the 29 businesses competing in the OBC
space based on several criteria including "value add potential"
to end-users, partners and investors. The top five players,
according to In-Stat, are:
- Office.com
- SmartOnline.com
- DigitalWork.com
- Onvia.com
- Allbusiness.com
These rankings are subject to change over
the next six months as established players evolve and
a slew of new entrants such as Works.com and ImproveMyBusiness.com
go live and raise the competitive bar. Stay tuned!
Report
Information
With
more than 50 million small and SOHO business employees
having access to the Internet in 1999, the opportunity
for online destinations targeting these markets is phenomenal.
Online business centers provide content and community
to small business users, in addition to many offering
commerce and consulting capabilities. These services help
to make the Internet a useful and powerful tool for small
business users. Because of the unique value these sites
provide so many small business users, In-Stat believes
online business centers will emerge as a key channel to
reaching and teaching small business customers. These
firms will eventually fit tightly into the Application
Service Provider value chain in the role of the "business
services provider." This report assesses the OBC market
and ranks the leading sites, including detailed profiles
of the top ten providers.
How
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