PhilWeb eyes P2-B net income in three years

Newly-established information technology (IT) firm PhilWeb.Com expects to realize a net profit of over P2 billion within a three-year period as it banks on the huge but relatively untapped potential of business-to-business electronic commerce in the Philippines.

Alex Villamar, PhilWeb president, said yesterday that for the first year alone they are targeting about 12,000 small and medium enterprises (SMEs) which are yet to embark on e-commerce.

With a subscribed and authorized capital stock of P800 million and P3.2 billion, respectively, he said PhilWeb has a gross revenue projection of P6 to P7 billion by end of 2003.

So far, the country is five years behind the US in e-commerce implementation and two years behind its developed Asian neighbors such as Hong Kong, Singapore, Taiwan and Korea.

Moreover, of the estimated 450,000 local Internet users, Villamar said less than one percent engage in e-commerce.

According to Villamar, the company is prepared to provide a very high bandwidth of 1.5 megabit per second, a speed which is 15 times faster than what is normally given by ordinary Internet service providers so as to encourage the use of the Internet.

Thus, he said, PhilWeb customers could gain easy access to multi-media files and applications and engage in online business-to-business transactions.

PhilWeb, he said, is primarily looking at revenues it could gain from such activities which has a return 12 times than that of customer-to-business deals.

For instance, Villamar said they could have an arrangement with a software company for online program distribution with PhilWeb getting a three-to-five percent commission for every product sold through its Internet portal.

PhilWeb, he added, could also host, market and manage e-commerce solutions developed by partner firms.

E-commerce, he stressed, could be used for various applications such as telemedicine, distance learning education, commodities exchange, securities trading, among other things.

And with the problem of online security already having been addressed, he said there is no longer any reason why enterprises should not engage in e-commerce and enhance their profitability.

PhilWeb, he said, is also looking for other IT firms which it could acquire or may also invest in.

Villamar added that at least six foreign investors have also signified their intention to either invest in PhilWeb or enter into a joint-venture agreement for content distribution and software development, among other arrangements.

"Nobody really understands the potential of the value chain. Right now, there is no structural or business model to tap on that potential. So we want to be at the leading end of this sunrise industry," he pointed out.

PhilWeb is 75 percent owned by the group of former Trade Minister Roberto Ongpin while the remaining 25 percent is held by the Cabarrus family who own the South Seas Natural Resources, a PSE-listed company which PhilWeb recently bought into.