Netscape Marketplace Strikes Deal with Travelocity

In a bid to further expand its e-commerce offerings, the Netscape Netbusiness Marketplace announced Tuesday that it has struck a deal with Travelocity.com (Nasdaq: TVLY) to sell airline tickets, hotel bookings and car rental reservations.

The Netbusiness Marketplace, which is a joint venture by AOL Time Warner (NYSE: AOL) and online business-to-business developer PurchasePro (Nasdaq: PPRO), provides a venue for businesses to conduct online transactions.

The companies did not indicate when the Travelocity.com private-label marketplace will be up and running.

At the same time, AOL and PurchasePro said they have entered into an agreement with the BizProLink Network to supply business applications and industry-specific content for the marketplace. Financial terms of the deals were not disclosed.

"By further expanding the industry-specific and broad-based markets available to buyers and sellers from companies of all sizes, we have increased the effectiveness and relevance of the Netbusiness Marketplace," Fred Singer, AOL Interactive Services senior vice president and Netscape Netbusiness general manager, said of the agreements.

Building on B2B

Looking to tap the exploding B2B channel, AOL and PurchasePro have accelerated their efforts to beef up their e-marketplace in recent months. To this end, they have initiated joint sales, marketing and product development operations.

The companies also have looked to drive marketplace membership with the Netbusiness Card, which allows registered users to create a online storefront for free.

According to AOL and Purchase Pro, one of the chief strengths of the marketplace is its potential to "reshape procurement processes, modify business communications between buyer and seller, and enhance channel development for businesses, regardless of size."

Their work seems to be paying off. Since March alone, the companies have entered into agreements with Hewlett-Packard (NYSE: HPQ), Homestore.com, Monster.com and Spherion Corporation to offer services on the site. In addition, the firms have said that they are looking to integrate all of PurchasePro's 140,000 businesses into the marketplace.

Spending Spike

A study released in March by Gartner found that North American B2B spending reached US$255 billion in 2000. The figure represented 59 percent of the $433 billion spent worldwide. Moreover, the research firm predicted, North American B2B e-commerce spending will hit $480 billion in 2001.

Endurance also may be a key to B2B success . A separate report issued in March by ActivMedia Research revealed that 32 percent of all B2B companies currently online are turning a profit. However, 46 percent of the B2B firms that have been online for three or more years are profitable, the report found.

Executives are also bullish on the benefits of B2B, according to a December study by consulting firm Arthur Andersen. Half of the executives surveyed by Andersen see digital marketplaces as a "critical means of competitive positioning" in 2001.