The Two Faces of B2B: Market Mania Masks Performance Problems
By Cindy Christ

Judging from share levels of business-to-business electronic commerce stocks, investors seem willing to pay almost any price to buy into the vision of e-business.

Shares in Vertical Net (VERT), which operates 55 industry- specific trade exchanges in the food, technology and communications industries, rocketed $58.50 Friday to a new 52- week high of $252.06 after Microsoft said it would invest $100 million in the company to jointly sell B2B e-commerce services to small- and medium-sized businesses.

Rivals like Ariba (ARBA), Commerce One (CMRC), Chemdex (CMDX) and SciQuest (SQST), which all went public last year, have seen their stocks soar between 250 and more than 2,000 percent from their initial offering price, even though none has ever turned a profit.

There's no doubt that B2B companies like these and others have succeeded in selling their story to Wall Street. But a recently released study shows that some B2B operators still have a lot to learn if they're ever going to deliver on the industry's promise.

Leading market research firm Forrester Research evaluated 30 B2B sites and found that every one failed basic tests of value, ease and reliability. The problems were so basic, in fact, that it makes you wonder how such a celebrated business model could prove so inept.

"Not even the nascent state of the Web can excuse the amateurish lack of usability of today's eCommerce initiatives," wrote Forrester researcher Paul Sonderegger in the report "Why Most B-To-B Sites Fail."

According to the study, which didn't identify the Websites reviewed, all of the sites were poorly designed and difficult to use. Based on a scale ranging from a high of 50 to a low of negative 50, the top site earned only an 8, and the average score was a negative 8.

"The sites we evaluated demonstrated a fundamental failure to incorporate decades-old principles of software design," Sonderegger said in his report.

A central problem with the sites reviewed was a failure to provide users with information needed to meet their goal.

For example, the study cited a telecommunications company that failed to include prices for services offered for sale on its Website. A computer seller allowed customers to pick certain options to customize their systems, but failed to provide a link to a description of the options available.

Incredibly, only half of the sites allowed users to conduct transactions online. And in tests, errors ranging from repeated broken links, or "file not found" messages, to order forms that refused to submit information, prevented shoppers from finding products and making purchases.

What's more, despite claims promoting B2B sites as "global" marketplaces, Forrester found that only 23 percent of reviewed sites offered useful content in at least four languages, and just 20 percent accepted currency other than U.S. dollars.

Rounding out the problems were "rookie errors" like inconsistent placement of toolbars, missing content and illegible text, and high-end failures such as inadequate search and personalization functions.

To correct the problems, Forrester says B2B operators must focus on meeting users' goals. They also must perform extensive testing to ensure a successful user experience.

Once operators begin to discover the design elements and infrastructure needed to create effective B2B sites, Forrester predicts B2B operators will file a "legion" of patent infringement suits to prevent rivals from using the advances they've developed.

"Taking a page from Amazon.com's playbook, companies will patent key pieces of site functionality - just as Amazon has done with 1-Click buying," Forrester said.

Based on these findings, before B2B can take off, the industry must first mend its split personality by fusing promise, performance and patents.