DuPont teams to form online marketplace
The chemical giant is forming a joint venture to build online marketplaces for business partners and suppliers in the apparel, chemical, and construction industries.
The joint company, called CapSpan, will use investment firm Internet Capital Group's business-to-business services for building Web-based marketplaces. The firms hope to leverage DuPont's name recognition as a large-volume buyer and supplier to help boost the venture.
The companies aim to build marketplaces with other strategic partners, including some of Internet Capital Group's 55 partner companies. Financial details of the deal were not disclosed.
DuPont is following a trend started by large automobile manufacturers, such as Ford and General Motors. Both of these firms have launched their own online marketplaces for their suppliers and dealers.
"The actual bottom line numbers on these initiatives will come out in the next 18 months," said Tom Harwick, an analyst at Giga Information Group.
Whether the ventures will be successful, however, "is a bet these companies need to make. The bottom line will depend on how they differentiate themselves from the other marketplaces, getting into the market early," Harwick added.
Even though the market is still in its early stages, shares in firms that provide business-to-business marketplaces have soared in recent months. And its not surprising: Analysts predict the market for online commercial transactions to grow to $5 trillion by 2002.
CapSpan will provide management, growth capital, financial, and technical support to DuPont clients looking to do business online with partners, DuPont executives said.
Erik Fyrwald, DuPont's vice president of e-commerce and new business development, will become chief executive of CapSpan.
Skip Maner, Internet Capital Group's vice president of acquisitions, will become chief operating officer. Both Holliday and Buckley will serve on CapSpan's board of directors. CapSpan will be based in Wayne, Pa.