home | back issues | who is dylan? | contact Internet business news and analysis. by Dylan Tweney Click for the latest updates  the tweney report for 19 July 1999   Two wrongs Online retailers Egghead and Onsale announced their merger last week, an event that should have been met with widespread skepticism [1]. But then, everyone got all excited about Egghead becoming an Internet-only retailer last year, when it was obvious to anyone who cared to look into it that the company was making a last-ditch effort to keep from going out of business. That was probably the first time that a company closed all its retail outlets and was rewarded by a soaring stock price... which goes to show you how successful the Egghead spin was. Onsale, similarly, has been burned in the auction market -- by eBay, which a year ago it was spurning as a mere online flea market. Now Onsale is going up against well-funded and well-publicized Buy.com in the online discount retailing arena. So do two has-beens add up to an Internet powerhouse? The merged company will sell computers and electronics as Egghead, and will continue to operate online auctions as Onsale; the merger enables the companies to save on marketing and operating costs -- and to combine their large online audiences, which together add up to 3 million customers, the companies say. But with competition from Buy.com and Amazon.com, which announced last week it would start selling consumer electronics (and can computers be far off?), the new Egghead has its work cut out for it. A quote in the WSJ's coverage of the merger said it best: "This is a case of two weak players banding together to stay afloat." [2] [1] Online Rivals Egghead, Onsale to Merge [2] Egghead.com and Onsale Announce a $375 Million Merger Agreement (Subscription required to access this story) ---------- PROCUREMENT SHOOTOUT: People occasionally ask me why business-to-business commerce is so much bigger, in dollar volumes, than retail commerce. One reason is that it's easier to convince the CEO to spend $100K on a solution that will demonstrably *save* a million dollars than to spend the same amount on a solution that might *make* a million dollars. Making money on the Internet is still dicey, as even market leaders pile losses on top of losses. But you can easily demonstrate that business-to-business commerce will save money, by making transactions between companies more efficient. One way to do that is through an automated procurement system, which Internet-enables the processes a company uses to purchase basic supplies -- office supplies, services, and the like. The market was defined by Ariba, whose solution costs over a million dollars to implement -- but lower-cost solutions are available. Three such solutions are reviewed in InfoWorld this week [3]. The comparison examines online services Works.com and SupplyChannel, as well as software-service combination Buying Chain. [3] The buying connection ---------- ODYSSEY UPDATE: My February column on Smart Frog invited readers to visit the SmartFrog site and sign up for the company's frequent-buyer program, which offers discounts on purchases at a variety of commerce sites [4,5]. I'm happy to report that so far, more than 160 readers have visited Smart Frog and named me as the person who sent them there -- generating $160 in referral bonuses. I've donated that money to the Odyssey Project, a nonprofit educational site used by thousands of schoolchildren to learn about the world [6]. [4] Smart Frog [5] Smart Frog will help get Internet shopping sales really jumping [6] The Odyssey Project ---------- NET PROPHET: Going global from the July 19, 1999 issue of InfoWorld The United States is accustomed to being at the center of the world's attention, online as well as offline. But within the next five years, U.S. companies will have to get used to the fact that the Internet is no longer dominated by Americans and English speakers. ... click for more ... ---------- ~ Back issues ~ Greasing the skids - CDNow swallowed up - small businesses on the Net - one-click buying (7.12.1999) Net backlash - reports on death of eBay premature - Sites that fail to scale (7.5.1999) The whole dang archive...		Sign up for the tweney report, my free weekly newsletter! Just enter your email address in the box and click the button: Email: Optional - your name: More about the tweney report / how to unsubscribe / privacy policy Links worth clicking web informant David Strom's Internet insights cluetrain.com Net market manifesto - read it! tbtf Tasty bits from the technology front ditherati Deflating industry bombast daily posthoc.com Upfront guide to San Francisco - way cool!
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