The Russia Journal, June 29 - July 5, 2001

By VLADIMIR KOZLOV The Russia Journal

Web portals have had their day, and the future belongs to Internet-based corporate solutions, according to RosBusinessConsulting (RBC), a Moscow-based online-solutions and business information provider.

"We consider the Internet as an important element of our business," said Alexei Kuzovkin, vice president for IT. He added that while prospects are good for Russia's Internet market, only companies focused on providing Web-based solutions) will be successful - a priority area for RBC. "The time of pure portal companies is over," he said.

According to Kuzovkin, RBC's business strategy is similar to that of Bloomberg. "We use our business news Website as a tool to gain a strong reputation and clients for our other activities," he said, adding that the breaking even of RBC's news service is not on the agenda.

RBC was formed in 1992 as a business wire service mostly directed toward the rapidly growing private sector. In the mid-1990s, paid e-mail subscriptions were launched, and RBC was one of the first companies in Russia to launch a Website.

"At the beginning of 1995, we didn't even think that the Internet would have a significant impact on our business, but later we realized we wouldn't be able to develop without it," Kuzovkin said. "It was an urgent necessity to go online. If we had not done it, we would have lost a lot in terms of speed of delivering information."

According to Kuzovkin, the RBC Website initially served as a promotional tool for RBC news and analytical bulletins. None of the content was available for free.

However, with the 1998 financial meltdown an opportunity emerged. "There was an information vacuum in the first few days following the financial crisis, and we made the decision to begin publishing business news on our Website," Kuzovkin said, adding that the site received about 100,000 hits in the first week after the crisis -- an enormous amount for Russia's Internet of the time.

That move was a defining moment, he added. "The financial market, where the majority of our information buyers were, shrank drastically, and we understood that there were no prospects for a growth in that market for the next few years, so we turned our attention to the Internet as a market that had a potential for growth."

The decision was made to develop RBC as a financial news portal that would offer massive amounts of free information. But despite this, according to Kuzovkin, only about 20 percent of the information was - and is - available for free, with the rest being distributed to RBC's 5,600 subscribers.

In the years to follow, RBC-either developed or acquired a few more content-projects, such as the Utro.ru Web newspaper, C-News information portal on the IT sector, HotBox, Russia's-second popular free e-mail server, Krovatka.ru chat, webforum.ru forum portal, job.rbc.ru job search engine and LBN banner exchange network.

The company's advertising department was turned into the Webland Internet ad agency, which sells ads on RBC's different projects, as well as on other sites and in off line media.

Kuzovkin said that the company's content projects have brought in many of its Web-design clients. They look at the RBC Website and then call us to ask who developed it," he said. "When many learn it was made in-house they place orders with us."

Although the majority of RBC's roughly 30 Web-related projects are currently underway, the company doesn't see Web design as a very promising area for the long term. "This is a too narrow and not very high-profit field," Kuzovkin said. "Web-based corporate automation and e-commerce are areas with much more potential."

"The Internet is growing, and all companies will take advantage of Web-based technologies in one form or another," the RBC vice president said. "There is a better future for projects in areas other than design because it is never clear if a company will be able to generate a lot of traffic on its Website, but all of them need automation solutions."

Currently, RBC is working on several large projects in the Internet solutions, including a cargo tracking system for the Railways Ministry. Other ongoing projects involve the Atomic Energy Ministry, Comstar telecom group, Rosbank, Mail.com, Rosna insurance group, GUM department store, the Bolshoi Theater, the Labor Ministry, LUKoil Arctic Tanker and Tetrapak. The company would not give details of these projects, but said a well-known foreign company is likely to join its clients soon.

RBC is also active in SSL (Secure Sockets Layer) certificates for secure online transactions. "The Web-certificate market is quite large," Kuzovkin said.

RBC is also looking at CRM (Customer Relations Management) software as a prospective field. Several domestic companies have expressed interest. "We see a lot of hopes on this area, too Kuzovkin said.

Registering domain names is new area for RBC, according Kuzovkin. The company steppes onto that terrain earlier last year when Russian-character doman name registration was announce.

"New versions of Microsoft Explorer and Netscape Navigator that recognize Russian-character URLs need to arrive first" -Kuzovkin said. "So, it would be realistic to say next February."

RBC's turnover last year was $8 million, and the company says it expect this figure to significantly increase this year.