The Change Mariner

Internet E-Commerce Poised To Remake Six Major Industries: Jewelry, Bill Payments, Telecom, Hotels, Real Estate & Software

Business Week Online:

The Web is threatening to force down the prices charged by traditional players, squeeze their margins, and even put some out of business. New technology, new ways of doing business, and new approaches to cutting out the middleman mean the old pricing power is collapsing in a series of industries -- and existing leaders will be forced to find new ways to make money. The pressing question is: How many more industries will be transformed by the Net? "How high is the sky?" answers Barry Diller, CEO of InterActiveCorp (IACI ) , which owns Expedia and other Net properties.

In the first wave of disruption, Amazon, Expedia, and others rewrote the rules for books, music, and air travel. Now the Web is poised to remake at least six more major industries: jewelry, bill payments, telecom, hotels, real estate, and software. In the jewelry business, online players are set to wreak havoc on traditional players. Amazon CEO Jeffrey P. Bezos, who jumped into the business on Apr. 22, says he can buy a diamond wholesale for $500 and resell it for $575. Never mind that Tiffany (TIF ), Zale (ZLC ), and neighborhood stores are used to getting $1,000 for the same stone. Five-year-old Blue Nile Inc. has proved that this strategy can be very profitable.