Small Businesses Online

Portals See Big Cash In Small Businesses (WSJ) talks about the efforts being made by Yahoo, AOL and MSN to woo small businesses and get them to set up storefronts on the Internet:

Hungry for subscribers, and the recurring revenue they provide, these three giants of the Internet world have re-energized their longstanding efforts to take America’s millions of small businesses online. All are now honing and promoting tailored products and services for small companies, with a particular emphasis on the smallest of the small. Next year, independent Internet-service provider EarthLink Inc. will join in, too, with a refreshed service package for this market.

Small businesses are an attractive target because they are more likely to spend money on premium services such as broadband access and Web-site hosting than are consumers, the portals’ core market. Research firm Yankee Group estimates the U.S. small- and medium-business shared-hosting market alone will reach $1.3 billion next year. Moreover, proprietors of companies with just a few employees tend to shop like consumers, which means the portals can reach them fairly easily with their existing mass-market infrastructures.

The portals have long tried to sell to this market. But small firms are a cautious lot, and they didn’t jump on the Internet bandwagon during the boom years the way many pundits predicted. The diverse needs of this market, which includes everyone from plumbers to florists to lawyers, many of whom lack technological sophistication, have made it hard to crack, analysts and portals say.

Have been thinking of an SME marketplace for emerging markets, along with related services in content, community and software. These are some of my oldest ideas and it may be time to revisit them.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.