Magazine

SPECIAL FOCUS: WEB BUSINESS MODELS

Viewing the Web as a Marketplace

by Gina O'Connor and Bob O'Keefe

Why have so many companies rushed to set up a Web presence? "Because it's there" just doesn't cut it--companies don't rush to place advertisements in inexpensive mediums just because they're there. "Because it's inexpensive" similarly doesn't paint the full picture--a commitment to the Web as a channel for marketing and electronic commerce can be a major investment.

We have been trying to answer this question, especially in the context of small companies. Small companies are particularly interesting because they have much to gain from the Web (particularly, an extension of their physical presence) and are often more innovative than their larger counterparts. But they also have a lot to lose; the Web can drain the human resources and enthusiasm that are essential to so many small companies. One research area in marketing focuses on the launch of a single product into the physical marketplace. We turned some of these ideas on their head and used the concepts from research about the physical marketplace to focus on launching products and services into a different exchange medium, namely the World Wide Web. Drawing from our research, we focus on three concepts: attractors, strategic drivers, and inhibitors. The Web has a number of attractors that tempt, or pull, companies to create a presence. Companies also have strategic drivers that push them onto the Web. Finally, the Internet can be characterized by certain dimensions that inhibit entrants, or cause entrants to withdraw. Understanding these concepts allows us to better understand the present phenomenon.

Gina O'Connor (oconng@rpi.edu), an Assistant Professor of Marketing, does research in the fields of product management, new product development, and marketing research. Bob O'Keefe (okeefe@rpi.edu) is an Associate Professor and is involved with work on IS World Net (a Web service for Information Science academics) and is the editor of Net.Value. They are both with the Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, New York.

Copyright © 1996 by Gina O'Connor and Bob O'Keefe. All Rights Reserved.