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Bigstep takes leap with free Web solutions

As it enters the competitive field of providing small-business Web sites, the start-up plans to offer a pricing structure that has become standard for consumer Web services.

As it enters the crowded field of providing small-business Web sites, Bigstep.com offers a pricing structure that has become standard for consumer Web services: it's free.

As reported last week, Bigstep, formerly known as the Springfield Project, will launch tomorrow as the latest company to offer small businesses a Web presence.

Other players in the field include Yahoo, CitySearch, and Intel with recently acquired iCat. Hundreds of other companies are targeting the small-business market with some part of the Web presence equation.

Analysts familiar with Bigstep's plans say that the free offer will not be the start-up's magic bullet. Various other companies offer some of their services free, though Bigstep appears to offer the most comprehensive free solution available.

At least one of those companies found that offering a free service caused more trouble than it was worth.

iCat offered a free Web storefront for vendors of fewer than eleven items, but discontinued the promotion after less than a year, shortly after its acquisition by Intel closed in February. iCat, which maintains a mall of Web storefronts, found that free services attracted absentee tenants, much in the way that free email services accumulate accounts that are left unused after they are registered.

"Some of the people building a free store were not maintaining the site," said an iCat spokesperson. "We found that they were not as serious as a person who put down a financial investment."

Still, offering a free set of integrated services for small businesses looking online could help Bigstep make inroads in a crowded market, analysts say. Ultimately, they add, the integrated collection of Web building, customer service, marketing, and other services could wind up being as attractive as the price point.

"You can get a lot of free services from a lot of these sites," said Laurie McCabe, analyst with Summit Strategies. "Free is good. But the other distinction that's really important is you can get an integrated platform. There are not a lot of places a small business can go where they can get this integration of services."

Bigstep's free offering will include Web hosting and an address at Businessname.bigstep.com (with the option of securing a domain from Network Solutions, which charges $70 for the first two years and $35 a year following), use of site-building and -maintenance tools, use of a Web-based customer database for contacting customers, marketing capabilities, and visitor analysis reports.

Bigstep said it would provide credit card accounts to users at cost. A merchant account with Cardservice International costs $14.95 per month and 15 cents per transaction, with a 2.67 percent discount rate for Mastercard or Visa.

In addition, Bigstep will offer "advanced" value-added services to its users for a fee. These fees, along with business-to-business advertisements and sponsorships that will run only on the main Bigstep site, will form the lion's share of Bigstep's revenue. Value-added services include financial services and ad-purchasing, which Bigstep will be able to perform in bulk for its clients.

Bigstep and its competitors are chasing after a market with great potential that has been slow take off. The United States has about 7.2 million small businesses operating outside the home, with between one and 99 employees, according to Access Media International. Only 1.4 million of those businesses have a Web site.

"What's happened over the past 12 to 18 months is somewhat disappointing," said Ryan Brock, analyst with AMI. "There's been about 25 percent growth, which isn't terrible, but in the Internet age it's disappointing."

Bigstep chief executive Andrew Beebe said his service will make inroads in this market by reducing the amount of time users have to put into their free sites.

"When you lower the financial risk to zero, you've changed one element of the landscape," Beebe said. "In terms of the investment in time, we've broken the work down into bite-sized tasks, rather than suggesting you need an hour to accomplish anything."

Brock said that small businesses are staying off the Web because of the time it takes to create and maintain a site. For the same reason, businesses that create Web sites often leave them in the brochure stage without turning them into working e-commerce sites.

"The technologies for making this easier are getting there, to the point where you can get a commerce engine up and running quickly, but the fire hasn't gotten going underneath the market," said Brock. "Something like Bigstep could be a good fit. But it all depends on how it's marketed."