When it comes to looking for virtual communities through the Internet, no one is immune to the bug, not even the world’s biggest company.

"Things have come between ourselves and our customers and we have to change that, to make them part of the GM community," Mark Hogan, president of e-GM, General Motors’ new venture to explore the burgeoning world of e-commerce, told more than 200 business leaders at "Virtual Communities & The Internet." The April 7 conference was sponsored by Wharton’s Reginald H. Jones Center in cooperation with the IBM Institute for Knowledge Management and Xerox Palo Alto Research Center.

"Through these virtual communities we at GM are looking to change radically," Hogan said. "In fact, we won’t even be GM in three years. We will become e-GM."

Other participants on the morning panel, "Building Internet Strategies," moderated by Wharton Deputy Dean David Schmittlein, echoed the same message: The Internet – and the virtual communities it is creating – will be transforming companies big and small, old and new. Ranjit Singh, senior vice president, Internet Software and Solutions at Xerox, said it has already radically changed how Xerox does business. "Xerox has been a copier company," said Singh. "We’re making it a knowledge company that uses the Internet."

Lawrence Wilkinson, vice-chairman of the 18-month-old Oxygen Media, which has a cable-TV channel and web presences aimed at women, is equally conscious of the changing nature of business today, based on the Internet. "In some ways, I feel like I am back in 1949, when TV was just radio with pictures," he said. "Soon after that, people started figuring out what TV was good at, which then forced radio to decide what it was good at. We are at the same stage today, when the Internet is forcing every other medium to find how it will survive."

Unlike the "old economy" Xerox and General Motors, Oxygen Media was directly designed to be a virtual community. Using a raft of figures that showed women control the retail-buying economy – for example, 85% of all personal household products are bought by women – Oxygen’s founders decided to connect the company to other people and companies that could enhance a virtual women’s community.

"We look at this not as a sprint – even though that is the common feeling with Internet businesses – but as a marathon," said Wilkinson. "Therefore we wanted to be involved with people for the long-term, since that is what a community means." Oxygen has aligned itself with, among others, Oprah Winfrey, the TV producers Carsey Werner ("Roseanne," "The Cosby Show," "Grace Under Fire"), Paul Allen’s Vulcan investment firm and AOL-Time Warner. "We found that we can’t just allow ourselves to create our product alone, but that we have to engage our users," said Wilkinson. "In the future, all businesses will have to be conscious of what we call ‘co-creation’ to survive."

e-GM’s Hogan is taking that message to heart. "Our mission is to use the Internet to get customers into the GM funnel," said Hogan. "We have B-to-B and internal business Internet components, but the focus is on the consumer. We have to make them feel like they are being responded to by the company." Accordingly, e-GM has made some unusual web alliances. For instance, it has a relationship with I-Can, a website aimed at disabled people. "There are 600,000 members there and if we can find out how to tailor products to them, we can be successful with that community," said Hogan.

Other e-GM alliances include CollegeClub, a website for college students ("We really need to capture that market," said Hogan.); ClubMom, aimed at new and young mothers, and Lifeserve, a website aimed at people who have had a life-changing event like birth, death or divorce. "We found out that 80% of people in those situations purchase a car within 12 months," he said. "That is a community we want to be involved with."

Wilkinson of Oxygen Media also found that extra research can only enhance this kind of community marketing. "When you find out what your users want, you can provide for them," he said. "We are research junkies. The best way to write a business plan is to let your users write it for you."

Singh talked primarily about a new Xerox software product called ContentGuard, which ensures that the virtual communities companies create or associate themselves with stay secure. "The power has shifted from the vendors to the consumer," he noted, primarily because of the large number of Internet communities. "But when you create a community," he added, "it is fragile. You want to know what these communities are doing and to protect, track and assess them."

The participants agreed that the virtual-community way of doing business is complicated, but that it is here to stay. "The biggest challenge of all is to change the traditional culture," said e-GM’s Hogan. "That is where everyone has to be headed to be successful."