Dot-com ... amazon.com ... kentuckyconnect.com... msnbc.com ... -- dot-coms are popping up everywhere you look. It's becoming part of the lexicon. It stands for an address on the Internet -- usually a company name, or some variation, followed by a "." and a "com" -- as in, commercial. An ever -increasing number of businesses large and small are using the vast potential of the Internet as a powerful way to market their products and services. What's behind it all? And, what should businesses consider when deciding whether or not to join the ranks of the "dot-coms"?

The Lane Report interviewed principals at five companies in Lexington and Louisville who are in the business of helping other companies and organizations develop a presence on the worldwide web and conduct business online. Relatively speaking, this phenomenon is still in its infancy, evidenced by the fact that all of these companies have been in the web development and e-commerce business for less than three years. All do web site design and development, and some are delving more seriously into electronic commerce. They've also experienced dramatic growth in their businesses as a result of the growing numbers of people who access the Internet for more than simply looking up "neat stuff."

The benefits of a web presence

There's money in cyberspace, and more businesses are finding that out, particularly smaller and home businesses. A recent survey of U.S. firms with fewer than 100 employees conducted by IDC Research, a division of the International Data Group (the world's leading technology and media research company), found that U.S. small businesses accessing the Internet increased from 19.7 percent in 1996 to 41.2 percent in 1998, and predicts that web usage among small businesses will approach 4.3 million small firms by 2001.

Further, they predicted that PC-owning small businesses with home pages on the Internet will increase from nine percent in 1997 to more than 20 percent by 2001, and that 36 percent of those who plan to go online expect to use the internet to sell products. The reason is money. IDC said small businesses with a presence on the web have average annual revenues of nearly $3.8 million, compared to about $2.7 million for those who don't.

Rick Baker, president of Orb-bit Design Group in Lexington, says virtually all business can benefit from a web presence. "The worldwide web can help most, if not all small businesses," he says. "For the first time in history, a business can talk to its employees, vendors, suppliers, partners and customers all at the same moment. It's something that virtually all small businesses should be exploring or utilizing."

In large part, that's because the demographics of the Internet are changing. Jeremy Schell, president of Global Marketing Concepts in Louisville, notes that two years ago, potential clients were unlikely to find a significant portion of their customers using the Internet, but that's not as true today. "I think the demographics have changed dramatically as more people have become users. It's opened up a whole spectrum for people to market and communicate online."

Jim Gleason, president of Buzzword, Inc. and Kentucky Business Online in Lexington agrees. "It has become an increasingly important tool for businesses to use as a fundamental way of communicating with customers and potential customers. That wasn't the case just a few years ago. Today, people are more accustomed to using the web to find information about areas of interest, or products and services. The question has gone from whether or not to even have a presence on the web to 'how much' presence you need." Gleason likens it to the Yellow Pages, where some people feel the need for a greater presence with a display ad, and others can get by with only a listing, but virtually everyone is at least listed.

Kevin Mims, president of MaxWeb in Lexington, says the Internet should be thought of as simply another tool for telling people about your company, but with one big difference. "We're talking about a worldwide, 24-hours-a-day, seven-days-a-week potential audience. You can either use it and make some money or sit back and watch everybody else use it and make money."

Site development

How do you decide if a web presence is right for your business? And, if it is, what then?

First, educate yourself as much as possible about the medium. Schell says the first thing a person needs to do is the obvious -- get Internet access. "You need to be familiar with it so you can make educated decisions. I tell my clients to look at similar businesses in Austin or Seattle, for example. You'll get lots of good ideas and it'll familiarize you with what's out there," he says. "It also puts you in the shoes of your potential customers who are out there looking, so it gives you an understanding from their perspective."

Just because a product or service you offer might not seem to lend itself to an online format doesn't mean you shouldn't have a site. "McDonald's has had a web site for years, but they don't sell Big Macs online, for obvious reasons," Schell points out. "But, they do promote their corporate image and community activities -- and they talk with their customers."

Next, find a reputable professional with both technical and marketing smarts.

Although the technology is what makes the magic of the Internet work, it's still marketing and it lives and dies by many of the rules of traditional marketing. "It still requires strategic marketing knowledge and thinking," Gleason explains, "so you need to work with a company who can create good user-friendly design and also help you with good messages and copy writing."

"Get with a firm that knows what they're doing," Mims says. "Look at the work they've done with other customers, talk to those customers." A good web developer will help you through the decision process by asking all the questions you may not think to ask.

Keys to success

Once you've decided to establish a presence in cyberspace, there are several key factors that contribute to the success of online marketing efforts, the developers say.

Quality and content count. Colvin Atchison, president of The Image Foundry in Louisville, says the Internet has leveled the playing field for smaller businesses. "Most any small business can look as good online as a much larger company, and that likely wouldn't be true when you're talking about what we think of as traditional forms of advertising and marketing," he says.

"On the web, you'll find some really great sites, but tons of garbage both in design and content," says Gleason. "You need something that will rise above the noise. It's not simply driving traffic to your site, but making sure they come back again and again."

Make sure your site is interactive, easy to navigate and easy to maintain. All developers stressed that it's not just a means for businesses to talk to customers, but for customers to talk back, so effective sites are those that make it easy for customers to contact you.

"If you're just going put a brochure on the web, it's probably not going to pay off," says Baker. "You need to think of it as a way to have a conversation with your customers. The web site is the portal for that conversation. If you simply put up information and don't update it, it's not going to do much for you."

Contrary to widespread perceptions, Baker says a business owner doesn't need to be particularly technically savvy to make the Internet work for him. Firms are rapidly developing applications to make it easier for clients to update their sites, as well as conduct business online. Both Mims and Gleason say they can quickly teach most clients how to perform simple maintenance and update of their sites. "We've never found a client where we couldn't teach to do routine maintenance and updates," Mims notes. "It's like wiring a house," adds Atchison. "Most people wouldn't try to wire a house, but they can do routine things like change fuses. Putting together a quality web site is like wiring a house. A good developer can put together a quality site that is relatively easy for the client to maintain and update and for the customer to navigate and communicate with you."

Link to as many sites as you can. It helps create traffic to your site, and that's what you want. Baker says he tells clients to think of everyone they do business with regularly -- bankers, attorneys, accountants, vendors, trade associations, insurance companies -- and try to make sure your site is linked to theirs. Then, make sure your site is linked to sites you don't have contact with in the real world, like business directories and search engines and make sure those links are updated regularly. A web developer will be able to help you do that.

Put your web site address on everything that's printed -- business cards, stationary, signage, all advertising and product packaging. "You need to drive business to your site," Schell explains. "If you have two stores in a city and open a third, you're going to do some things to drive business to that new store. You need to do the same thing with marketing online. Making your web address visible on everything you do helps drive traffic to your site."

Make sure your site will accommodate e-commerce, now or down the road. At least two of the five web developers we spoke with are already heavily invested into helping clients conduct business on the web. But all say you should at least build your site to accommodate e-commerce when and if you decide to do it. While a growing number of companies are doing business on-line, there remain challenges for companies to take this step.

"When you talk about integrating it with your accounting systems and business plans, very few small businesses have that infrastructure in place," says Schell. "The ability to receive goods, take orders, process them, ship them and receive payment for them is more complicated than turning on a switch."

Another obstacle to widespread e-commerce growth has been security, but that's changing. "People are starting to realize that they freely give their credit cards to waiters and waitresses for 10 to 15 minutes at a time, or they order things over the phone with their credit card all the time, so it's becoming less of an issue," Mims notes.

Where we're headed

If the recent holiday season is any indication, electronic commerce may have finally begun to come into its own. According to eNews, the Internet Business Journal, online sales reached about $5 billion from Thanksgiving to New Year's, That's more than double what most industry analysts projected, and four times greater than the same period at the close of 1997. IDC predicts that online sales will reach $68 billion in 1999, its highest level ever and twice that of 1998. By 2002, they predict that $400 billion of sales will occur online. Another leading technology research form, Forrester Research, predicts online sales will reach $1.3 trillion by 2003.

While the amount of money spent on traditional shopping still dwarfs that spent online -- Wal-Mart alone had sales of $118 billion in 1997 -- experts agree that e-commerce is here to stay because of the continued growth in the number of people gaining access to the worldwide web. According to IDC, nearly 100 million people accessed the web in 1998, and they expect that to grow to nearly 320 million people by 2002.

Further, IDC says in 1997, about 26 percent of Internet users bought goods or services online in 1997. By 2002, they expect 40 percent of users to buy online, which amounts to 128 million people. IDC's projections are based on more than 40,000 primary research interviews per year in 17 countries, as well as their forecasts for PCs, network computers, modems and other technologies.

At least two of the web developers interviewed say they are significantly expanding the focus of their business from simply web page development and design to e-commerce.

"Doing business online is a way to make money while you sleep, 24 hours a day, with little effort at a fraction of the cost of huge printed catalogues with nationwide distribution," Baker says. "If done right, it allows you to be quicker and more flexible, and if you have a good idea, you can make it pop by using the web."

Another big advantage to doing business online is the ability it gives a business to easily track customers and their behavior.

Stuart Woodring, vice president of Forrester Research, says companies who ignore the phenomenon do so at their own peril. "Companies that are unprepared to compete online will be pushed aside by competitors who understand how to use the Internet to generate new value and efficiencies for their customer."

Roger Williams is a staff writer for The Lane Report.