GE to launch digital exchange

Trying to build on its business of running private Internet marketplaces for companies, General Electric Co. (GE) will launch a new digital exchange that could become one of the largest on the Web.

Dubbed Express Marketplace, the network would allow participating companies to request quotations, track purchase orders and get bids on goods and services.

The GE subsidiary that will oversee Express Marketplace, GE Global Exchange Services, already runs networks for 100,000 companies that trade via proprietary networks. Drawing those businesses into the new Express Marketplace would create one of the largest business-to-business exchanges.

“Both buyers and suppliers will now have the opportunity to expand their horizon of potential trading relationships from regional to national to global,” said Bob Brooks, vice-president of GE Global Exchange Services.

To make this new venture succeed, GE must quickly attract some of its largest business customers to prove that the exchange is a viable place to find buyers and sellers.

“They need anchor tenants to make it attractive,” said Bob Parker, an analyst with AMR Research. “The hurdle is to get the first two or three companies to show that there is trading on the marketplace.”

GE’s challenge is compounded because there are other technology companies also trying to get businesses linked to digital marketplaces. For example, Commerce One Inc. (CMRC) and Ariba Inc. (ARBA), two major b-to-b software vendors, aim their wares at large businesses like those that make up GE’s customer base.

GE also must convince companies that its new exchange can handle the kinds of transactions they need to perform. Different industries have different requirements when it comes to ordering goods. For example, the electronics industry often makes orders using part numbers, whereas a manufacturer may order products using criteria like weight and size.

The Express Marketplace would appeal to a range of businesses, a spokesman said, because in addition to offering applications that cut across all industries, GE Global Exchange Services would offer customization for particular customers, if needed.

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