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Business e-commerce sites target small companies

Online business-to-business provider Biztro is building a network of technology partners in various industries for small companies, and Net giants are following suit.

Business e-commerce sites aimed at small businesses are all the rage.

Today, Biztro, a provider of business-to-business Net services for small businesses, said it raised $33.9 million in its third round of financing, bringing its total funding to more than $47 million.

Biztro, which was founded in 1999, has developed a network of business and technology partners in various industries that offer business-to-business services to the small business market.

The company's announcement follows a string of similar moves in the past months by a number of Net giants that have either built their own business-to-business technology and services for small businesses or pumped funds into companies that do the same.

In March, Yahoo said it created an e-business portal aimed at small businesses, providing links to marketplaces that connect buyers and sellers for commercial supplies and industrial goods. AOL said it is partnering with business-to-business specialist to help small businesses build marketplaces or join existing ones.

In its third round of funding, Biztro received financial backing from Andersen Consulting, VerticalNet, a business-to-business exchange broker, Bank of America, Softbank Venture Capital and Marsh & McLennan Capital, and telecommunications provider BellSouth.

Business-to-business marketplaces allow companies of different sizes to negotiate and bid for industrial and commercial goods with several suppliers.

Manufacturers hope to cut costs and increase sales by offering lower prices to suppliers, while makers of commercial and industrial goods hope to increase sales by reaching a wider range of potential customers through the Web.

The business e-commerce sector is expected to dwarf the business-to-consumer market, prompting many companies to venture into the business arena. Until recently, the business-to-consumer industry was grabbing all the headlines, helping to make companies like, AOL and eBay household names with their products and services targeted for nonbusiness consumers.

Forrester Research projects that business-to-consumer spending will reach $184.5 billion in 2004, up from $20.3 billion last year. In comparison, a number of leading research firms have the business-to-business market pegged between $2.7 trillion and $7.3 trillion by 2004 from about $131 billion in 1999.