B2B: Storm Clouds on the Horizon
& Could Content Finally be King?

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The field rapidly has become overcrowded with too many B2B companies chasing the same markets. There is only room for one or two major players in each segment, but already there are dozens battling it out. B2B "wannbes" may wind up left out in the cold, wondering what happened to the trillion dollar market.

Dire predictions about the future of B2B from such heavy weights as old media powerhouse, Forbes, and new economy champion, Business 2.0 - could this be an early warning sign like the canaries who keeled over in the coal mines, alerting miners it was time to head for the exit?

Maybe.

This is the rationale: The field rapidly has become overcrowded with too many B2B companies chasing the same markets. There is only room for one or two major players in each segment, but already there are dozens battling it out. Transaction fees will not scale up, since, as the market grows, ever larger transactions will not produce proportionate fees, competition will be cut-throat and margins will continue to be sliced, squeezing the middle man which is the website. For really large business transactions, suppliers, like the Big Three automakers, are setting up their own sites and other B2B "wannbes" are just left out in the cold, wondering what happened to the trillion dollar market.

There is a unique dynamic which is created on the Internet, through the interplay of "Internet Time" - warp speed-- and the "transparency of competitive strategy". The result is that as rapidly as new and innovative business models are created, they are also replicated and deployed by competitors. This makes for an increasingly efficient marketplace, but also one where players can become obsolete or squeezed out entirely in increasingly short cycles.

Because of the factors mentioned, as well as cost of set up, the difficulty of connecting buyers and sellers, the increasing cost of driving traffic to a website, B2B may not be a sustainable strategy for most websites.

So what do, at least, some of the credible gurus think ultimately will be profitable on the web, as opposed to highly valued on a volative stock market? At least one Net guru, Joe Firmage, writing in the May Business 2.O, in "The New Math", says : "Contrary to early predictions by some experts in this field, I believe that content, in all its rapidly diversifying forms, will be that most profitable kind of asset in the Internet Economy". He points out that content is very scalable, there is great leverage in deploying it, thereby allowing the possibility of the most robust operating profits.

With the huge valuations and exploding markets in this industry and websites in a race for "stickiness", content, whether original, aggregated or repurposed, is beginning to be recognized as a key and highly valued element in creating the elusive "stickiness" which is vital in the competitive landscape.

Up to this point, there have been content vendors, content aggregators and Isyndicate has created a content marketplace. As the content sector heats up, there will be an array of different content delivery platforms and price ranges allowing greater flexibility and enabling those with "robust intellectual and creative resources" to enter the fray.

In the early days of industries, the play is all in infrastructure, the pipes and chips, copper, cable or satellites which allow the Net to reach its audiences. But in the end, with every medium from radio to TV to movies, as the industry matured and the infrastructure issues became increasingly complex and specialized, the technology dissolved into the background and content emerged as the centerpiece and engine of profit. Think "I Love Lucy", still viewed daily around the world. Think Titanic ,Star Wars or Saving Private Ryan

No one can predict the future of the Net, except that viewing it is like standing in the center of a tornado and it shifts the landscape of everything, particularly economics and business models. But one thing is certain: the Net will be the most powerful economic generator, as well as cultural change agent, we've ever had. Whether the vehicle which changes your business turns out to be B2B, building community, or delivering content, you must seek to catch the next wave and, through constant attention and intense concentration, stay far enough ahead of the pack to see that you are riding the crest, instead of crashed to the shores.

The news from the front at this moment: be wary of B2B....you don't want to be headed for the storm cellar after the door has slammed shut.