Small and home-based businesses are responsible for 51 percent of the private gross domestic product, according to the Small Business Administration. And most of them, at one point or another, have spent some of that capital at their local Kinko's. The granddaddy of copy shops, Kinko's sells just under $2 billion in copies, document binding, printing, and business services every year.

This week, Kinko's finally got Web-ified, announcing its Kinkos.com initiative at a printing conference in New York. The company is the latest in a series of traditional retail shops, including Kmart, Wal-mart, and Toys R Us, to set up its dot-com operations as an independent company. Kinkos.com, to be launched this summer, will use the retail store operations of Kinko's to process orders for marketing products such as newsletters and business cards.

Last year, Kinko's partnered with iPrint.com for online document and customized printing orders. That gig is up for iPrint.com next week, as responsibility for the Web site falls to its competitor, Liveprint.com, which will be renamed Kinkos.com. Kinko's (which holds a majority stake in Kinkos.com) joined Liveprint.com backers Chase Capital Partners, Flatiron Partners, and Kinko's investor Clayton, Dubilier & Rice in kicking in $40 million to get the new venture off the ground. "If it can be fulfilled at a Kinko's branch, Kinkos.com will offer it," says former Liveprint.com chief executive officer Rick Steele, now CEO of kinkos.com.

STRAIGHTENING OUT THE KINKS

Kinko's itself has come a long way since its founder, Paul Orfalea, started selling school supplies and 10-cent copies on a University of California campus in 1970. A copyright-infringement suit in the late 1980s sent Kinko's looking for a new market, which it found in the burgeoning home office market. The 24-hour copy shops became a staple for procrastinating college students with reports to finish at 3 a.m., traveling businesspeople in need of a local fax machine, and home-business owners looking for a well-stocked "branch office."

Like many other brick-and-mortars, the privately held company found it needed some outside cash to fund technological and geographic expansion. In 1996, Kinko's sold one-third of the company to leveraged buyout firm Clayton, Dubilier & Rice for $219 million. A large portion of that money has gone into technology infrastructure and training for its 25,000 "coworkers," as Kinko's employees are called. "All our stores are now connected by T1 broadband networks and centrally controlled and monitored out of [the company's headquarters in] Ventura, California," says Kinko's CEO Joe Hardin.

Kinkos.com will be layered on top of that infrastructure, aimed at enhancing the small-business focus of Kinko's. "We are no longer just a copy shop," says Mr. Hardin. "Kinkos.com is all about access and putting the ability for our customers to create what they need in their hands." The move also could sweeten the image of Kinko's as a digital play, making it easier for the 30-year-old company finally to go public.

SET TO ENLARGE

Kinkos.com plans to hit Wall Street up with an initial public offering within the next 12 months. By positioning itself as a services provider for small-business marketing, with everything to "start, grow, and promote your business," Kinkos.com will share revenues from orders placed on its site with Kinko's itself. Mr. Steele claims that profits and productivity will actually increase, as Kinko's coworkers find themselves doling out less advice and cranking out more customer-designed orders from the site.

The move to ally with an established player like Kinko's was smart for Liveprint.com. Prior to the Kinkos.com initiative, Liveprint.com (like its competitor iPrint.com) let users customize their own products, and it then outsourced the fulfillment. Commercial printing sales totaled $58 billion in 1998, according to printing research firm CAP Ventures, but print shops are slow to adopt fulfillment alliances with Web companies. A recent report by market researchers Trendwatch found that only 1 percent of all print sales are currently generated online.

Kinkos.com competitor iPrint.com comments on the difficulty in its Securities and Exchange Commission filing: "There are disadvantages relating to online print services, including not meeting face-to-face with a company service representative, needing a computer that is connected to the Internet, and requiring a credit card or purchase order to make purchases." Since its incorporation in January 1997, iPrint.com has only signed up 14 printers to handle its fulfillment. IPrint.com does have a number of customers signed up to use its site's services, including Officemax and Sir Speedy, but its partnership with Kinko's effectively ends next week, according to Mr. Hardin. Tough timing -- the company is expected to make its Wall Street debut next week as well.