Web startups will fail without trading portal help

E-commerce firms which invest 80 per cent of their startup costs in marketing and advertising without establishing alliances are doomed to failure, a senior executive at HP Europe has claimed. Karl Terko, business development manager at HP's e.solutions division, said that instead of firms going it alone and spending vast sums of advertising money in a bid to attract Web clickers, trading hubs, which he described as mega-portals, were necessary to pull disparate business models together. Terko said: "We try and play every kind of a portal game. If you set up a business with the aim of just selling online, you won't be successful." Instead, Terko said, it was important to establish what HP describes as trading hubs, which pulled together telcos, banks, large media houses, consumer-customer relationships, service providers, content providers, business-to-business sites and business-to-consumer sites. Other elements in the equation would include appliance manugacturers, hardware manufacturers, and software and service companies. Strangely enough, HP makes big boxes for ASP, has a software and services wing, and has already forged alliances with a number of large appliance players including Ericcson and Nokia. It has also signed up 130 firms in 20 countries to its Cyber Bazaar scheme, a sort of technology mart intended to marry apparently different solutions with each other. "Trading hubs are the next generation portals," Terko said. "You need to create an eco-system of partners so that everything works together." And, it appears, HP has been quietly beavering away since the e.solutions division was set up last Autumn, creating such networks of partners. Merko said that as part of its push, HP had set up an equity division, which had already put money into a fair number of firms, and had plans to invest even more. He said: "The mega-portals, such as Yahoo! will still be there but smaller portals will have to change their business models". ®

• HP demonstrated its WAPPified car, which uses WAP technology to help drivers navigate their way around Europe. Sporting the trademarked W@P logo, HP said it has already clinched deals for the technology with both Mercedes Benz and Porsche.