IDC reports that, by 2003, 500 billion people will spend more than $1.3 trillion online. For shopping portals, that means lots of traffic, leading to generous ad and affiliate sales for sites that can attract the most, and the right, eyeballs.
A shopping portal is a site offering a collection of gateways to various online stores and services. According to Charlene Li of Forrester Research, the biggest portals-Yahoo!, AOL and MSN-will grab about 40 percent of the market in 2004. The rest of those ad dollars ultimately will go toward vertical portals that specialize in just one type of niche or content site.
For start-ups, the clear message is, "think vertical." One promising area is online sales of office supplies to small businesses. Sites like works.com and BizBuyer.com are bringing start-ups together to build purchasing clout. This provides them with access to low-cost business supply deals usually offered only to larger companies. These companies are also working to automate small-business purchasing practices. For entrepreneurs, this type of business makes sense for two reasons: 1) Forrester predicts the market for office supplies will grow from $2.9 billion in 1999 to $6.4 billion in 2000 and 2) as a small business, you'll certainly know your audience!