Metabrowsers Meet Resistance
By Laura Lorek, Inter@ctive Week
June 19, 2000

Metabrowsing has captured the attention of the business-to-consumer world, allowing shoppers to find the best bargains on everything from Beanie Babies to the latest CDs in a central location. Now, that craze is quickly spreading to the business-to-business (B2B) world, and some industry watchers believe the technology could have a big impact on an electronic exchange's ability to maintain a loyal customer base.

"In the long term, the marketplace is a commodity, and in the end the metaservices are where the stickiness is," says Munjal Shah, chief executive and co-founder of Andale, an auction management software vendor.

Metabrowsers in the consumer world let Net surfers select whatever content they want or find the best bargains on merchandise on the Web.

At least a half-dozen companies offer metabrowsing services for content, including CallTheShots, Octopus.com, Quickbrowse.com, OnePage.com and Yodlee. On the merchandise side, companies such as AuctionWatch.com and Bidder's Edge allow buyers and sellers to search all of the major auction sites for products, rather than having to flip back and forth between locations.

These services have had such an impact in the business-to-consumer (B2C) arena that eBay launched suits against several services, looking to block them from accessing its listings. This month, it won round one by getting a temporary injunction against Bidder's Edge. However, Bidder's Edge believes it will win round two through an appeal and, what's more, it plans to launch the same kind of metabrowsing service covering B2B sites by the end of the month.

James Carney, chief executive of Bidder's Edge, says his company is within its legal rights to use metabrowsing technologies to search listings openly posted on the Internet. "The [injunction] order relies on law governing trespass on personal property, which we don't believe should be strictly applied to the Internet," Carney says. "Clearly, there is a need for guidance from the Appellate Court, as this order will have significant impact on the openness of the Internet."

The dilemma for B2B exchanges lies in who ultimately controls the customer relationship – or, as Andale's Shah puts it, who has the most "stickiness." If a company is looking to find the best deal on an electronic component, for example, it could use a metabrowser to search five or six B2B exchanges at a time. It's the metabrowser operator that will gain the repeat customer, not any one exchange.

Bill Burnham, a general partner at Softbank Venture Capital, recently said his company is so concerned about the potential impact of metabrowsers on individual exchanges that it has decided not to invest in such marketplaces as Neoforma.com; Ventro, which owns Chemdex; or VerticalNet. Instead the venture capital firm is focusing on companies that are building the underlying infrastructure to support electronic exchanges, such as Ariba, Commerce One and ClearCross, formerly called Syntra.

"When users have such a consolidated view of all the possible exchanges within a particular market, the value of any single market decreases dramatically," Burnham recently wrote.

Burnham's views on the potential impact of metabrowsers are not shared by all industry watchers. Arthur Sculley, author of B2B Exchanges: The Killer Application in the Business-to-Business Revolution, says there are clear differences between the B2C and B2B worlds that will limit the impact of metabrowsers.

Unlike Beanie Babies, which can be purchased with a credit card, deals struck in the B2B world are often worth thousands, and sometimes millions, of dollars. For example, Procter & Gamble last week said it would buy $100 million worth of natural gas this year on an exchange called EnergyGateway.com. Buyers and sellers on most B2B exchanges have to register and log in with passwords. They must be checked for credit history and their ability to fulfill a contract before they are eligible to participate in sales. On certain exchanges, such as the marketplace proposed by the Big Three automakers, suppliers are also told they must accept orders on that particular exchange if they want to continue doing business with the manufacturers. Ford Motor, General Motors and DaimlerChrysler are joint owners of the exchange, so they certainly have no interest in shopping elsewhere.

"I really don't see how metabrowsing works in this area," Sculley says. "It will be very difficult for metabrowsers to get into the exchanges that are closed."