Study: Consolidation Coming to E-Commerce Sector

The e-commerce industry can expect to see a consolidation before long that may change the face of the Web, according to a new Advisory Report issued by Current Analysis examining the implications of Yahoo!’s acquisition of Viaweb.

The report, written by David Baltaxe, contends that while it has been
relatively easy for anyone to set up an online storefront and sell online, the
concept has not filtered down to the lowest levels of Web users.

Yahoo!’s brand name and promotional budget should ensure that Viaweb’s
technology will reach the most basic online audience, the report said.

“Just about everyone online will know how to sell online,” said David Baltaxe,
Internet Commerce research analyst at Current Analysis. “As competitive
portals are sure to match this functionality, prices will drop, and we could
be in for a new rush of commerce-enabled sites similar to the explosion of
personal Web pages and free e-mail accounts that litter the Internet.”

This is the first time one of the major portal or directory services will
provide the tools for commerce site building and host the stores itself, the
report said. Netscape is already moving in this direction. Current Analysis
expects Lycos and Excite to respond quickly–whether through acquisition or
partnership–to add similar commerce service provider features to their own

Commerce product developers, and the commerce service providers (CSPs) that
utilize storebuilder tools in their services, ought to enjoy a short-term jump
in sales as Yahoo! increases small merchant consciousness about online selling
opportunities, the report says. However, companies like Intershop and iCat
that target the small and mid-sized merchant directly and through CSP
partners, could find their ongoing customer base eroded by Yahoo!’s entry into
the market.

“Yahoo!’s acquisition of Viaweb appears to be a significant event in the
evolution of Internet commerce and the World Wide Web,” said Baltaxe. “As the
portal wars continue, we expect to see further consolidation within the
commerce industry and believe that the partnerships will slowly work their way
up the levels of the market.”

For a copy of the full Current Analysis Advisory Report: Commerce as
Commodity: Internet Selling for the Masses, contact Kristine Brown.

Current Analysis Inc., based in Sterling, VA, is a source of competitive
information for the business, financial, vendor and end-user communities.
Founded in 1996 by Fred J. McClimans, Current Analysis uses a Web-based publishing system to deliver analysis of industry trends and events as they happen.

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