RealTime IT News

Report: Top E-Marketers Raked in $7 Billion Last Year

Fifty-two leading electronic marketers generated an estimated $7.03 billion in 1997, according to a new industry survey, which will be updated on a quarterly basis.

Leading the pack were telecommunications and computer hardware marketers Cisco Systems and Dell Computer, with $3.2 billion and $1.01 billion in electronic sales respectively, according to Simba Information's Electronic Advertising & Marketplace Report newsletter.

Overall, business-to-business sales dominated the Web/online marketplace at $6.02 billion, compared to sales for leading consumer Web retailers, which totaled $999.2 million in 1997, the report estimated. Sales figures were gleaned from interviews with company executives and estimates based on category growth rates and trends.

Many companies experienced triple-digit growth rates, according to estimates. Digital Equipment Corp.'s Internet sales grew 313% in 1997 to $950 million from $230 million in 1996. In the fast-growing Web book sales market, Amazon.com's sales grew to an estimated $121.7 million in 1997, from $16.6 million in 1996.

Computer reseller NECX had $35 million in revenue last year. According to Brian Marley, general manager of NECX Online, the company was generating sales worth $5 million per month with consumers accounting for 70% of the purchases. Getting people to actually execute an online buy remains a problem, however, as only 2% of NECX visitors actually purchase a product, Marley said.

Preview Travel was booking $3 million per day by the end of 1997, but the company had revenue of approximately $12 million for the year, according to newsletter estimates. It is the commission-based relationships between airlines and hotels that has prevented online travel agents from enormous revenue rather than any factors pertaining to the Web as a sales channel.

Online auctions have established themselves as a formidable retail channel. Segment leader Onsale finished 1997 with approximately $75 million in revenue. Through the first nine months of 1997, Onsale generated $56 million in revenue, up 833.3% from $6 million for the same period in 1996.

Online commerce has established itself as the primary catalyst for businesses to come to the Web. While advertising revenue continues to increase, it has become a secondary revenue stream for many Web publishers that have begun selling goods.

By comparison, Web advertising revenue reached just approximately $600 million in 1997, the report said. Advertising is seen as a means of acquiring quick revenue to cover expenses, while commerce is regarded as long-term profit.