Ownership structure and business model of electronic business-to-business marketplaces

Many experts have predicted that the main thrust of electronic commerce in the future will be business-to-business (B2B) commerce. According to eMarketer, huge amount of B2B transactions are already occurring. In 2004. B2B electronic commerce is expected to be 12 times larger than business-to-consumer (B2C) electronic commerce. Because the electronic B2B marketplace is at the core of B2B transactions, it is one of the most popular and important research topics in electronic commerce. Because of the high expectations for B2B, thousands of electronic B2B marketplaces have been created. However, only a few of them are active and many are dying, leading to a lot of speculation about which electronic B2B marketplaces will be successful and survive.; This research deals with two interrelated aspects of the B2B marketplace. First, I have been investigating which ownership structure of the B2B marketplace will work well in terms of competition and social surplus. I am analyzing B2B marketplaces with different ownership structures: neutral marketplaces and biased marketplaces. Biased marketplaces are owned by the suppliers or buyers in the industries which these marketplaces serve, while neutral marketplaces are owned by independent third parties. I have found that biased marketplaces provide greater surplus to both buyers and suppliers compared to neutral marketplaces. Also, neutral marketplaces are more likely to be successful in industries where both buyers and suppliers are fragmented. Second, I am trying to identify which business model of B2B marketplace, private or public, will be used in different industries. What factors affect the choice of a business model (such as joining a public marketplace or creating a private marketplace)? I have identified factors in each industry and each firm which affect this choice of business model, and I seek to examine the impact of these factors. My research especially focuses on the impact of uncertainty on a firm's choice of B2B marketplaces. Following the paradigm of literature on the real option, I see uncertainty as an opportunity in the uncertain future of electronic B2B commerce and see the value of IT investment in implementing B2B marketplaces as a real option.