Who stands to lose from businesses moving online?

The companies most directly threatened by e-commerce include travel agencies, entertainment ticket operations, mail-order catalogs, and retail stores--particularly software stores. e-commerce is already successfully invading their territories. A recent Forrester Research report predicts that sales of entertainment and travel tickets on the Internet will climb from $475 million in 1997 to more than $10 billion by the year 2001. Forrester says that figure represents 8 percent of all travel tickets. As Bill Gates puts it, e-commerce is about to eliminate the middleman. The buzzword of the day is disintermediation, a way of saying that anyone between the seller and the buyer is in big trouble. But a closer look reveals that e-commerce may be creating of a new kind of middleman. Some of the most talked-about e-commerce success stories, such as Amazon.com and Virtual Vineyards, are really a new kind of intermediary. Amazon.com doesn't publish books, after all, and Virtual Vineyards doesn't make wine. They are simply online distributors. But these e-middlemen must demonstrate that they add value to the buying process, through marketing, customer service, or some other method. If they don't, customers will vote with their modems and cut them out of the loop.

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