Risk of becoming yesterday's news or not, the smell of money continues to drive business and people with ideas to the Internet. Cisco estimates that about 70,000 Web sites are created every day. How many of those will have a long life- span will not be known, but one thing is certain, the potential to generate business by leveraging the power of the Internet is staggering, although estimates vary.

Electronic commerce, defined by the US Census Bureau as 'any transaction completed over a computer network that involves the transfer of ownership or rights to use goods or services', will generate business worth US$7.29 trillion worldwide by 2004, up from US$145 billion last year, the GartnerGroup, a technology business adviser, says. The value is forecast to reach US$403 billion in 2000 and US$953 billion in 2001.

Forrester Research says that in the US alone, electronic business from one business to another (B2B) will be worth US$2.7 trillion by 2004. Spending on packaged e-commerce software will reach US$14.5 billion in 2003, rising from just US$3.1 billion in 1999.

International Data Corporation (IDC), predicts that the market in Europe for e-commerce sales and marketing software applications will be worth US$479 million by 2003.

Both IDC and Forrester say however, that e-commerce growth will be propelled by e-marketplaces, which will play a major role in business-to-business e-commerce. Described as new models for conducting e-commerce, including auctions, bid systems and exchanges, e-marketplaces are forecast to capture 53 per cent of all on-line trade.

The GartnerGroup notes that e-market makers are forecast to 'facilitate US$2.71 trillion in e-commerce sales transactions by 2004', representing 37 per cent of the overall business-to- business market.

A Net market maker is 'an organisation that develops business-to-business, Internet-based, e-marketplaces of buyers and sellers within a particular industry, geographic region or affinity group', according to the GartnerGroup.

Management consultants, A. T. Kearney, says Net market makers, or Web- based trading communities, represent 'a huge portion of the business-to- business transactions conducted on the Net'. A Net market maker, according to the consultancy, is a company that creates an Internet-based market to facilitate electronic commerce between buyers and sellers.

The development of e-marketplaces is gathering momentum.

It is one of the largest e-marketplaces, with business-to-business sales expected to reach US$600 billion in the next few years. It has not yet begun operations, but when it does, this e- marketplace will provide services including open sourcing, e-catalogues, auctions and dynamic pricing, supply planning and logistics.

According to Hewlett-Packard CEO Carly Fiorina, it offers 'fundamentally new ways to master the complexity of supply chains'.

While e-marketplaces continue to sprout, more new tools are also becoming available.

Last week, iPlanet, an e-commerce partnership between Sun Microsystems and Netscape, announced a new platform enabling enterprises to launch business-to-business e-marketplaces.

The iPlanet Market Maker, leverages open standards, and offers the flexibility for customising to specific needs.

E-marketplaces, then, is the next level of e-commerce, the next frontier.

International Data Corporation's vice-president for Internet and e-commerce strategies, Richard Villars predicts that e-marketplaces will be the future of business-to-business e-commerce.

Addressing the issues that small business face on the e-frontier, Mr Villars, told the US Senate at a hearing last week, e-marketplaces 'present the best option for small business that want to expand their business through the Internet'. But, he noted, some factors, including what steps are taken to reduce the amount of investment needed for small business to establish an e- commerce presence, will determine whether they can integrate with e-marketplaces successfully.

He said there were 'hundreds if not thousands' of e-marketplaces, and that while these will account for 7.5 per cent of business-to-business e-commerce in 2000, in the next four years, the value could exceed US$1.2 trillion.

He also pointed out that small business will continue to play a valuable role as buyers of goods and services over the Internet. But as sellers, their role was marginal, he said, adding that their role would be enhanced through e-marketplaces.

IDC has predicted that e-commerce marketplaces will grow to about 10,000 in the next 18 months, from about 1,000 as at now.

Forrester predicted a couple of months ago that e-marketplaces will have the biggest impact on computing and electronics, shipping and warehousing, and utilities industries. More than 70 per cent of trade in these industries will be directed through e-marketplaces, the Internet research firm says. While advising suppliers to 'prepare for the new rules in these dynamic marketplaces', Forrester says big companies should regard joining e-marketplaces as strategic assets.

But success in the new frontier will depend on many factors. A. T. Kearney says in a study that achieving the critical mass of buyers and sellers will be the key factor and that industry knowledge is needed to reach that stage.

In addition, the consultancy says, they must choose the right commerce model, provide the right content and appropriate connections.

A. T. Kearney also found that transaction fees, which are a main source of revenue for Net market makers, will get squeezed in the future and that they will need to offer sophisticated trading solutions to succeed in the long-run.