B2B Bartering.

Website business models are falling out of favor so fast that between the time this is written and published, the buzz words may have changed entirely. Accepting that risk, I'm going to focus on a concept that has gotten a fair amount of attention lately: the business-to-business exchange.

A true exchange operates like the New York Stock Exchange or the Chicago Board of Trade. Colorado is going to have one of those soon. Fort Collins-based CyberCrop.com, a real-time exchange for cash commodities such as corn, soybeans and wheat, plans a full launch in July. Unlike the futures market, where people trade options to buy grain, CyberCrop.com's exchange will facilitate the actual sale of the commodities. According to CEO Scott Deeter, who spent the last 10 years in agribusiness with Cargill and Koch Agriculture, "We are an exchange giving multiple buyers and sellers the opportunity to trade 24 hours a day versus a bid posting site or an auction site. CyberCrop.com is a good addition to traditional commodity institutions which deal only with the futures market."

What distinguishes the B2B exchange concept from other B2B sites is dynamic pricing. Unlike B2B sites that are merely catalogs selling fixed priced items to businesses, dynamic pricing sites offer variable pricing options. One such example is the online auction. Another is the online exchange.

The online auction is the simpler of the two. A seller offers something to sell and buyers bid on it. The online exchange is a two-way process, with buyers and sellers both making offers. If someone is willing to sell and someone else is willing to buy, a deal can be made. No waiting around for multiple bids.

Another Colorado company planning an exchange component is Longmont-based e-Greenbiz.com. The company, which had a soft launch in January, is a vertical portal for the "green industry," serving landscapers and garden centers on the buy side, and nurserymen, greenhouse growers and hard-goods manufacturers on the sell side. The site will move products in three different ways: hard-goods catalog, online auction, and exchange. Since exchanges work well with commodity items that vary in terms of availability, it is an appropriate pricing mechanism for nurserymen needing to move excess perishable products. "A good example would be a commercial landscape contractor who is doing a major project for an office complex and is wanting to buy truckloads of trees. He will put that out as a request for bid and all vendors of trees would have the ability to bid and dynamically price those," said John Cochran, president and CEO. "We are a marketplace, and we are an exchange."

Finally, the Colorado company receiving the most national attention is ChannelPoint, a 1,000-person company based in Colorado Springs. It began operations in 1996, making software for the insurance industry. In 1999 it announced that it would create "an open Internet exchange." That concept has since evolved into helping individual insurance companies set up personalized e-markets within ChannelPoint's vertical portal, ChannelPoint Commerce. While the goal is to allow insurance brokers to shop for the best deals for their clients, the site is more about streamlining paperwork than competitive pricing. ChannelPoint, having filed an IPO with the SEC, was unavailable for comment due to the required quiet period.

While it is impossible to predict which Internet exchanges will stand the test of time, the concept is a step in the right direction. Dynamic pricing is one application that fully takes advantage of the Internet's interactive, 24-7, geographically-neutral environment.