Two-thirds of Asia's online sites may fold by 2003: Survey

BANGKOK (DPA): About two-thirds of Asia's business-to-business electronic marketplaces may fold by the year 2003 when the estimated value of online transactions in the region is set to top US$400 billion, news reports said.

According to Boston Consulting Group (BCG), a global e- commerce consultancy, while the amount of B-2-B online transactions in Asia are set to grow substantially from $35 billion last year to about $400 billion in 2003, the fledgling industry is destined for a major shake-up similar to the one happening in the U.S.

BCG's vice president Scott Desmarais warned that most of the 750 horizontal and vertical electronic marketplaces which have sprung up in Asia would not survive, said the Bangkok Post.

He said to survive, electronic marketplaces needed to be regionally focused and would require the support of powerful industry incumbents.

"Without these elements, electronic marketplaces will simply not gain sufficient traffic to stay alive," Desmarias said last Thursday.

BCG's survey shows that many Asian electronic marketplaces overestimate their income potential.

"It is clear that with unrealistic financial projections and overpenetration in certain industries, there will be a dramatic shakeout among electronic marketplaces in the region," said Desmarias.

Thailand's electronic marketplace, with only about 20 players, is one of the smallest in Asia.

Separately from Washington, the record industry upped pressure on Napster to start blocking record swaps on the Internet, submitting a list of 135,000 titles on Sunday.

Under a court ruling last week, Napster has three days - or until Wednesday - to stop the informal trading of the song titles.

Acting according to the injunction issued by District Judge Marilyn Hall Patel, the Recording Industry Association of America provided the first major list with song titles, artist names and names of computer files under which a song is traded, the Industry Standard reported on its online service.

The record companies charged that Napster violated copyright protection by developing a program that allowed Internet users to swap music files they had stored on their home computers.

The files often bear titles or nicknames that are different from the formal song titles, forcing the record companies to search the Internet to provide the exact file names that are to be blocked.

Napster started blocking titles last Sunday, but Internet users found ways around the blockade. There are also other Internet outlets that provide swap services for music.

Napster says it has developed a screening system to block copyrighted material, but with most popular songs unavailable, there will be little reason for its 60 million registered members to use the service.

Internet experts predict that if access to popular songs is effectively barred, most of the music fans who now download songs from Napster will move to rival file-sharing websites that are nigh impossible to shut down because they have no central servers or corporate structure.

In San Fransisco, chip-making giant Intel sent a further blast of gloom across the high tech economy last week by announcing plans to eliminate 5,000 jobs or 6 percent of its workforce and that it would miss first quarter revenues.

"The economic slowdown affecting PC demand has continued and have spread to the networking, communications and server sectors," Intel said in a prepared statement.

The company has 80,000 workers worldwide and said it would reduce its workforce mainly by attrition over the next nine months. First quarter revenues will be about $6.5 billion, down $2.2 billion from the last quarter and about $0.9 billion less than its original forecast.