RealTime IT News

When B2C Sector Slows, Investors Can Look to B2B and Infrastructure

Merrill Lynch recently warned of a pull-back in the business-to-consumer sector. The firm cited slowing growth in the seasonal growth drivers (percentage growth of new Internet users, total e-commerce dollars spent, and total advertising dollars spent).

It makes sense. The growth curves will flatten as we enter the summer months. During this time, less people go online, less people spend money online, and advertisers curb their spending. Senior analyst, Henry Blodget does, however, see promise in two Internet sectors...business-to-business e-commerce and Infrastructure.

Reporter@Large-Luke Fronefield, takes the same stance. Reasoning?


These stocks are often referred to as the "plumbers" of the Internet because they provide the equipment and services which support the life-line and continuous flow of the Internet. The companies within this sector benefit from the rapid growth of the Internet without having to sell their products/services directly over the new medium. While there are now roughly 135 million worldwide Internet users, Forrester expects the number to balloon to 500 million users by the year 2004.


B2B e-commerce is expected to grow to a $1.3 trillion market in the U.S. alone by 2003. Within the same time period, B2C e-commerce will be worth roughly 108 billion, or 10 times less. A premium is placed on B2B because of its market size, high barriers-to-entry, the eyeball factor and its inherent network effect.

The following analyses should be helpful for investors, looking to tap into these lucrative sectors: Net Value, A Wake Up Call for Investors, Future Synergistic Benefits: Where Clicks and Mortar Meet, B2B: The Bigger Wave and The B2B Ladder Approach.