E-Godfathers Nurture Online Startups

If the likes of Amazon and eBay are destined to forever dominate e-commerce, why are the biggest names in the business working so hard to boost fledgling startup companies?

Take Steve Case, CEO of America Online, for example. As far back as five years ago — ancient history in cyber-years — AOL offered business incubation services to entrepreneurs whose potentially profitable ideas were stuck at the starting gate. Now, what once was a sideline at AOL has become a major focus, as Case has directed his company to nurture new e-businesses.

Sustaining the kind of success that AOL has enjoyed will likely require more than a few strategic partnerships in the near future. When AOL had a few hundred thousand subscribers, it was enough to provide only news, weather and sports.

Not anymore. With AOL’s 19 million members, Case must take the magnetism of online shopping seriously. In fact, when asked recently what was more important, the part of AOL that deals directly with its users or AOL’s moves into e-commerce, he said that he considers the two elements to be “inseparable.”

Can You Spare A Dot-Com?

Case’s attitude is music to the ears of startups that are wondering how to make a dent in the armor of an economy that has almost instantly taken on a life of its own. After all, could a small, independently-owned bookstore hope to create any waves on the Internet right now without a godfather like Steve Case?

AOL hopes for a symbiotic relationship with any number of businesses by hosting their online stores and thus allowing the small business to trade on the strength of the giant. Still, companies with the global view of an AOL realize that the first phase of online commerce, e-tailing, is setting the stage for what promises to be the lion that roars, business to business.

Mutual Back Scratching

Just last week, Sun Microsystems unveiled plans to give a leg up to new e-businesses by offering affordable products and services for starting up. Why? Because by doing so, Sun becomes the godfather that the startup will most likely honor by buying Sun’s servers, workstations and software for network computing.

Look for more such godfathers in the days to come. Michael Dell, for instance, the CEO of Dell Computer Corp., has shifted his focus from PCs to the Internet. Dell’s message to businesses is simply to get on the Internet and do it now.

Dell’s message makes sense, because he knows the value in the tech world today is in e-commerce, not simple PCs. So, for a company like Dell, making PCs that are commerce-enabled — and then encouraging businesses that will need those computers to get on the Internet — is a wise move indeed.