Bevy of deals bring businesses together online, companies hope to cut costs with e- marketplace
USA Today, By James Cox

March 27, 2000 - Technology is wiring together ever-stranger bedfellows in a torrent of new deals that also are overturning some centuries-old business practices.

A spate of announcements in recent weeks is:

Making partners of rivals
Cut-throat competitors are leaping into online ventures that let them pool buying power to cut costs -- and could eventually lift their share prices by making them look like technology plays.

Boeing, British Aerospace, Lockheed Martin and Raytheon are close to creating an electronic marketplace to buy materials and parts for aviation and defense manufacturing.

The three largest U.S. paper companies -- International Paper, Weyerhaeuser and Georgia-Pacific -- will jointly sell paper and forest products online. Five of the USA's largest home builders plan to sell homes on a shared Web site.

Heinz, Nestle, Unilever, Procter & Gamble and Kraft are among 50 major consumer-products companies plugging suppliers into a system that would let them bid and get price quotes.

"Almost everybody is going to be simultaneously competing and cooperating with someone else in the same industry," says Paul Almeida of Georgetown University's McDonough School of Business.

As stock market valuations for dot-com start-ups shoot sky high, many old-line manufacturers are struggling to lift their share prices. One way: start a business-to-business exchange and spin it off, as Ford, General Motors and DaimlerChrysler say they will do.

Making partners of strangers

A group of 234 publications with 300 million readers in 17 countries is going public with its online classified ad network, Trader.com.

Sears and French retail giant Carrefours, which don't go head to head, have invited dozens of their competitors to join their GlobalNetXchange marketplace. Besides squeezing savings from supply chains, the exchange would bring the two retailers fees as its owners.

Replacing traditional business tools
TradeCard says it has done away with the need for a letter of credit, the main instrument of payment in international trade since the mid-17th century.

The start-up is stitching together freight forwarders, shippers, dockside inspectors, cargo insurers and a financial institution to create a paperless transaction-settlement process. The process, now in its pilot phase, could reduce fees by up to 90%.

It could fill a hole unaddressed by e-commerce.