State of the Web: Just What Is B2B, Anyway?

It hit me, watching our television show, that we are assuming a level of familiarity with the Web that is false and too radical when we talk blithely about business-to-business.

Join the discussion on Cramer's Latest, go to the Red Hots Forum, or visit our B2B Forum.

B2B is, for purposes of this discussion, like saying, "Do you know the market?" Are you talking about stocks, bonds, governments, gold, real estate, oil? Are you talking about buying stocks, selling stocks, working in a brokerage house or being employed as a stock-picker or a futures trader?

In other words, "business-to-business," like "the market," is a meaningless concept unless fleshed out.

I don't pick the analogy idly. The stock and bond markets are in many ways close to being perfect. They have posted prices, efficient ways of delivering the goods, and settled ways of doing things.

Could you imagine if everything were like the stock market, where you could buy or sell anything at the best price, efficiently, and not worry about delivery, as we don't in the stock market? Can you imagine if the custom of the paper or the chemical or the steel industries was as clear-cut as the custom of your buy of 200 shares of America Online (AOL Quote)?

That's what business-to-business is all about, making markets in things that didn't have markets, or regional markets, or shady markets before.

Let's say you are setting up a store, a general merchandise store. You need everything from merchandise across a whole host of industries to sell to the actual accoutrements of your store, everything from cash registers to boxes and bags to light fixtures.

I know I am oversimplifying things a tad, but I am trying to get you into this world because that is where the money is being made.

The ultimate B2B play would be if you, the general merchandiser, could go online among a bunch of storefronts and get the best prices for all of those goods. You would then have them delivered to a location and you could start up, knowing that you had procured everything as cheaply as possible and with no middleman.

That's what almost all of the B2B plays in our rotisserie league are about. So Stamps.com (STMP Quote) is about not having to get in line at the post office. And RoweCom (ROWE Quote) is about getting all the publications you need at the best prices. And VerticalNet (VERT Quote), which I am long, is about finding one place to buy all of those things you need at the cheapest prices.

Now, imagine, sometimes an auction-style market brings out the best price. Sometimes, because you have better credit, or more money, or something that suppliers want, you can negotiate directly, pick up the phone and short-circuit the whole process.

But that is a rarity. For the most part purchasing decisions are made by people who don't know enough and can't get enough information to do a good job.

Business-to-business plays are meant to change all of that. They are meant to change the way goods are bought and sold in every industry.

Let me take one more stab. Imagine this crazy world. You want to buy a stock. You go to the yellow pages under "stocks," and you see some stocks that you recognize and a whole host of them you don't. All say that prices are "negotiable," but nobody will give you a price over the phone. You have to come in, and you have to bring a pickup truck because you can't take "delivery" of a stock without one. When you get there, you better bring a lot of ID and your tax returns, as well as a Dun & Bradstreet credit check and letters of recommendation. If you live in a big city, you get better stocks than in a small city. You go to the wrong stock and you get the wrong price and you get burned.

That's how business is run right now for everything but stocks. When this B2B revolution is over, everything will be traded just like stocks. And the world will be a better, more efficient, more fair place.

Random musings: Our best TV show yet. Look, if you can't get Fox News Channel on your cable system, it is time to make some noise. I can't get it on mine, in Summit, N.J., and if something doesn't change very soon, I think I am going to mete out some pain to my cable operator. Join me.