Electronic marketplaces (EMs) are virtual marketplaces where buyers and suppliers meet to exchange information about prices and product and service offerings, and to negotiate and carry out business transactions. They are at the centre of the current growth in Internet electronic commerce, both in business-to-business (B2B) and business-to-consumer (B2C) markets, although the value of B2B electronic commerce is proportionately five times B2C and is expected to exceed ten times its value by 2003. In this paper, we trace the evolution of EMs, from their initial beginnings as computer-to-computer links between corporate trading partners, to their current forms as multi-vendor Web based catalogs and ordering systems that service B2B customers. We also describe in detail B2B electronic marketplaces, including sell-side, buy-side, and intermediary-supported multi-vendor catalog systems that link customers and suppliers. We discuss the role of management in guiding firms through this difficult transition period, including choices that depend on the economics and the advantages and disadvantages of each form of electronic marketplace for both suppliers and customers.
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