May 30, 2001, 12:00 AM

Survival calls for new tactics, says Webmergers

New b2b2c and bricks-and-mortar strategies are keeping some dot-com players alive, a new report finds. Nearly half of web-based companies surveyed have changed their business models.

Kurt Peters

Executive Editor

 

Many of the Internet companies surviving the dot-com shakeout of the past year have made significant changes to their original business models and strategies, according to a new report from San Francisco-based Webmergers.com, a research-backed broker of Internet properties. Of 125 companies studied, including several b2c retail companies, 44% extended or shifted offerings from consumers to deeper-pocketed business customers in a b2b2c strategy, the survey found. Among them, MightyWords, a digital content provider and retailer, relaunched last December as an infrastructure provider for other sites wishing to sell digital content. Companies already in the b2b space also moved “upstream;” one-third of the 35 b2bs studied switched their focus from now-embattled dot-coms to seek out larger, more established corporate customers.

47% of 90 b2c companies surveyed shifted to a b2b model entirely, while 16% of the companies adopted bricks-and-mortar models. Lucy.com, for example, closed its web store earlier this year and opened a land-based store in New York. ThinkNatural, an online seller of natural health products, purchased a mail-order business and launched its products in drugstores throughout the UK. Amazon.com did some repositioning, the report noted, selling overbuilt warehousing and distribution capacity as e-commerce services to traditional retailers.

A total of 14% expanded services while as many narrowed offerings. What Webmergers.com president Tim Miller terms “serial morphers” have completely reinvented themselves and their business models as many as three times. “Inspired by the most effective motivator of all-–the desire for survival–-the dot-coms studied are showing impressive speed, boldness and creativity in their adaptive behaviors,” says Miller. “We may underestimate the Internet sector. A second generation of startups may be adapting in ways that may surprise us with their success. The second time may be a charm.”

 

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