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Report: B2B marketplaces to spend $80 billion

Despite an economic slowdown, business-to-business marketplaces are expected to spend up to $80 billion on infrastructure such as technology and services by 2005, analysts say.

Despite an economic slowdown, business-to-business marketplaces are expected to spend up to $80 billion on infrastructure such as technology and services by 2005, analysts say.

That's up from $2.1 billion spent in 2000, according to a report released Thursday by New York-based Jupiter Research, which surveyed about 90 marketplaces.

"We think marketplace development is very high on the lists of CEOs," said Jupiter analyst Mark Harrison. "Even with the economy the way it is, they still realize the efficiencies that can be achieved by marketplaces."

Virtual marketplaces are Web sites that act as clearinghouses for bulk goods and services in a particular industry. Although competing companies generally cooperate to build the sites, online trade exchanges reduce costs and heighten competition by making the participants more efficient, anaylsts say.

Application service providers and systems integrators will make one-third of the $80.9 billion by 2005, Harrison said.

"Those companies provide the glue that puts together a marketplace between the many businesses involved," he added.

According to the report, the opportunities of technology vendors and service providers will increase substantially as online marketplaces begin to require more than basic transaction software.

The report also suggests that for marketplaces to succeed, they must develop real-time functionality, collaborative applications, and content resources such as search, tracking and pricing capabilities.