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NetMarket Review:
Jeff Pasternack

A few months back this column discussed the advent of vortals. As a reminder, a vortal is an acronym for vertical industry portal and it "is a Web site that provides a gateway or portal to information related to a particular industry, such as health care, insurance, automobiles, or food manufacturing. One of the vortals that article discussed was, which is one of the 50+ vortals offered by VerticalNet. A feature of this particular vortal is that companies could post Requests for Proposals (RFPs) and other firms would bid on the service requested.

To date, most RFP areas on vortals and other netmarkets have dealt with the exchange of goods such as medical supplies or computer equipment. Other vortals offer RFPs for computer and IT services but, for the most part, the complexity of the RFPs was rather minimal.

This past March, went live and it offers Fortune 100 and other large firms the opportunity to solicit bids on complex legal work. It was met with great fanfare and received extensive coverage in the Wall Street Journal. It was one of the first netmarkets to offer highly complex RFPs that require multiple attachments, varying professional fees for constructing the bids and multiple rounds of bidding.

One of the newer netmarkets to emerge in health care is Pharmaceutical firms come to this site and place RFPs for contract drug development work including both clinical and non-clinical research studies. Contract research organizations (CROs) place bids to complete this work. By engaging in business in this manner, both sides are able to leverage the power of the Internet into their traditional brick and mortar business models.

According to Kurt Mussina, founder and CEO of, CROs can reduce their selling expenses by a solid 15% for a contract if they are awarded one online. "The traditional sales model for CROs was to have a representative calling on pharmaceutical companies. As anyone in sales knows, this is an expensive and time-consuming process. Initially, the focus for salespeople was on developing a relationship with the research and development staff. Over time, however, the relationship development has migrated to the procurement staff and contracts are being awarded with more focus on the price provided that quality of service isn't sacrificed."

Through his years of experience in the field, Mussina realized that if he could devise a way to reduce the cost of sales, then CROs could become more competitive on the pricing. Similarly, if he could assure pharmaceutical firms that quality wouldn't be sacrificed, they could continue to use pricing as a significant factor in determining who would perform the testing without having the expense of meeting with CROs and distributing the RFPs. Combine these two elements with the power of the Internet and is born.

Netmarkets like represent the next wave of euphoria that the Internet will arouse. Behind the hype, however, lies a myriad of compelling business reasons for why netmarkets will continue to proliferate: reduced transaction cost, greater access to sales opportunities for sellers and access to a broader pool of qualified suppliers for the buyers. According to a recent study by the Gartner Group's report, "vendors that have a business model based on recurring revenue steams achieved by B2B transactions or subscription fees are best positioned to succeed in this market. Gartner research has concluded that a hybrid of "brick-and-mortar" and dot-com business and technology processes will emerge as the business transformation model that will represent e-health success." If the Gartner Group's projections are correct, netmarkets, like, that assist brick and mortar firms by providing value-added services that reduce costs and streamline processes, are well suited for the future.

Jeff Pasternack is the president of Dynamic Consulting Group, a franchise partner of 1-800-GOT-JUNK? and author of the TechnoPeasant Review.
If you have questions or comments about this column, please write to him at