News of the portal launch caused ShopNow.com's stock to gain $6.75, or about 40 percent, to $23.75 in morning trading. The stock has traded as high as $25.12 and as low as $10.93 during the past 52 weeks.
The Seattle-based company said the new portal will contain about 500,000 business-to-business listings, including links for products and services, business Web hosting and store building services and tools.
ShopNow.com's move to set up a business-to-business, or B2B, portal comes at a time when the nascent B2B sector is witnessing a nearly unprecedented explosion. Venture capital firms, consulting firms and established technology companies are rushing to take part in what is widely expected to become an Internet gold-mine.
B2B transactions in the United States are expected to increase 33 percent each year, with $2.8 trillion changing hands through business-to-business purchases, according to management consulting firm Boston Consulting Group.
Forrester Research has estimated that the B2B industry will explode to $1.52 trillion in 2003 from about $131 billion in 1999.
But ShopNow.com's B2B portal faces stiff competition from established players like Ariba, a leading firm whose products help transform companies into B2B businesses. Ariba runs a site called Ariba Network which connects buyers and sellers.
"Aggregating a significant amount of customers is crucial to the longevity of any business in this space--especially when talking about B2B," said J.C. Simbana, an analyst with American Frontier, a Denver-based brokerage firm. "It is vital to get a critical mass of clients of big businesses to become a viable company to survive in this space."
b2bNow.com, operated by ShopNow.com's business-to-business division, will allow companies to buy, sell and promote their products and services in 62 business categories. The categories include legal and accounting services, as well as venture capital, construction, petrochemicals and agriculture.
Analysts expect B2B players to flock to such portals since they don't have to rely as heavily on expensive mass advertising as business-to-consumer merchants, such as Amazon, Barnesandnoble.com and other online retailers.
While the products and services are not nearly as flashy as products listed at business-to-consumer sites like Amazon.com, Buy.com and other online retailers, the B2B sector is expected to help streamline corporate buying and selling, resulting in huge savings for companies and tremendous gains for those offering the B2B services.
"As one of the Web's largest business-to-business portals with access to 175 international markets, we enable businesses around the world to grow their businesses over the Internet and save valuable time and money while developing their Internet businesses," Dwayne Walker, ShopNow.com chief executive officer, said in a statement.