Article at a glance:

A future for e-alliances

Are e-alliances a fad of the past? Speed and scale remain important in the Internet economy, and alliances are often a faster and less capital-intensive way of gaining access to products, customers, and business capabilities than building them from scratch. But the stakes are now much higher, and the market has been less forgiving since last year's market correction for Internet stocks. How can chief executives of on- and off-line companies raise the odds that an alliance will succeed? To answer this question, the authors considered more than 700 deals announced from January 1997 to May 2000.

The take-away

E-alliances will remain an intricate and necessary part of e-commerce strategies. Making them work requires, among other imperatives, establishing a narrow scope for the alliance, committing sufficient assets, and facing up to tough governance issues.