Rivals Pair to Open Business Portals
SAP/Yahoo! and AOL Time Warner/PurchasePro try to get traction in both the business and consumer worlds.
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Yesterday's rivals are often tomorrow's allies. Not too long ago, in a television ad campaign, software giant SAP took a broad swipe at the dot com industry in general with its vision for the "new new economy." Viewers saw a janitor scrape the nameplate off the door of a fictitious, shuttered startup by the name of "Yowee.com," likely a thinly veiled poke at portal leader Yahoo!

Now, the two are on the same team and recently announced plans to link SAP's portal and application technology with the Corporate Yahoo! intranet system. Users will be able to integrate news and data feeds from Yahoo!'s content providers with insight and functionality from SAP's feature set, including tying customer records into news and analysis from Yahoo! "For both companies, it's a penetration play. [Yahoo!] has penetrated an incredible number of desktops, and SAP wants to go in that direction," says AMR Research analyst Kimberly Knickle.

Yahoo! believes that its case for the enterprise desktop is clear, claiming that 70 percent of all wired workers visit Yahoo! at least once a month. "Most of your employees are going to Yahoo! on a regular basis, so you can now bring that [Yahoo!] content into the context of your CRM information," says Jeff Pedigo, Yahoo! product evangelist. "It's a huge win for an organization that just spent multiple millions and potentially multiple years installing SAP to say that in 30 to 90 days they can roll out a portal to the organization that, by the way, has all of the SAP functionality integrated in it," he says.

Yahoo! gains a set of legitimate business applications to tout: While the company has partnered with Tibco for some time to offer an enterprise application integration platform, SAP is the first major proof of concept for a repeatable integration project. For its part, SAP can offer Yahoo!'s thousands of content sources to business users who may have been unconvinced by its earlier, application-centric portal offerings. "Yahoo!, because of its applicability above and beyond just a single application, helps get SAP in front of many more customers, and potentially many more seats," Knickle says. At the same time, Yahoo!, which has only sold Corporate Yahoo! into a relatively small group of companies to date, gains access to SAP's global sales force, which Knickle describes with a touch of understatement, as a group that "does a good job selling really big deals." No pricing has been announced for the SAP/Corporate Yahoo! technology link.

America Online's Marketplace Bid
At the same time, AOL Time Warner is looking to revive its Netscape brand as a top marketplace destination for small and midsize businesses. The company first entered a partnership with Las Vegas, Nevada-based PurchasePro in fall 2000 to flesh out the Netbusiness site, and in the spring announced a wide-ranging deal to integrate PurchasePro's B2B marketplaces for Netscape members. "The ultimate goal is to produce the destination site that has content, community and commerce on it," says PurchasePro Vice President of Marketing Chris Benyo, who compares Netbusiness with Microsoft's bCentral initiative.

Several marketplaces tried and failed to gain traction last year, but Benyo believes that the Netbusiness portal provides the critical mass necessary to make the marketplace environment worthwhile for both sides of a small business transaction. "Twenty years ago, if you sold fax machines, a smart [customer] asked, 'who else has this piece of equipment'. Until you get the network built, you don't have anything."

Knickle sees an opportunity for Netbusiness, which already offers free rudimentary Web site hosting to members, to take advantage of an underserved market. "Small companies aren't going to be ready for the many-to-many style, so ideally a company like AOL Time Warner/Netscape is going to understand how to reach these small companies and allow them to create their own version of what they need for a marketplace," she says. "AOL/PurchasePro is about getting some sort of 'good' [marketplace] model to small organizations who just need to start somewhere above the level of a shopping cart but don't have the means of doing it all on their own."

As for PurchasePro, Knickle believes that they are not only in the right place at the right time, but in need of a major sponsor like AOL Time Warner in order to stay relevant. "PurchasePro has an issue with fighting amongst a market of e-commerce application vendors in a situation where the big look like they're getting bigger and more powerful, and the weak look like they're fading away," Knickle says.

In addition to advertising revenue, AOL Time Warner and PurchasePro collect subscription fees for full-fledged seller participation in the advanced marketplaces. They also share revenues on sales of the jointly developed marketplaces and plan to unveil advanced services for buyers that will also incur a monthly fee. To date, AOL Time Warner and PurchasePro have signed several co-branding partners and marketplace infrastructure customers, ranging from fringe dot coms to industrial powerhouses such as Hewlett-Packard.

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