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You can't get much more physical than the United Parcel Service.

It's not so much bricks and mortar (although there is a bit of that) as wheels and people, lots of them, and a few airplanes as well.

Yet it has benefited as much as any company from the internet economy boom, not just in seeing its own business flourish, but in that most internet of ways, by going public in spectacular style. UPS's was not just any IPO - it was the biggest. Ever. It raised more than $5.47 billion, by selling just nine percent of the company. The stock market saw UPS in the same glow that has the online broker Charles Schwab, a company just over a tenth the size of conventional market leader Merrill Lynch in terms of sales, valued at over $7 billion more than Merrill. It's the same glow that sees Barnes&Noble's dot-com child valued at 1/6th that of the parent company when it has just 1/57th of the sales. And this by a company that for most people is still defined by brown trucks and brown uniforms, the guys you hire to get stuff delivered. Boring. If a branding expert were trying to create a high- tech image for a company, then the UPS livery would be the anti-color, the very antithesis of tech. Then again, what do you expect from a company that until 10 years ago did not even have a dedicated marketing department?

Not that it should worry. UPS already had one of the strongest brands around. It got it not by pouring money into fancy advertising or celebrity endorsements, but by being good at what it does, over and over again.

It's easy when you have the time - 92 years of it - to build a reputation for solidity and reliability.

The glitter, if you can think of brown having a glitter, comes from the internet. UPS is not a dot-com. There is nothing virtual about UPS. It is, as we've noted, wheels, oil, gas, airplanes, lots of people, and lots of information. But a lot of its image and its current marketing is all about rubbing up against the internet so closely that people - and especially investors - stop noticing the differences.

UPS is in the fortunate position, in the middle of a gold rush, of not having to scratch around in the dirt for gold. It supplies the shovels instead, or some of them. UPS is good at stuff that few dot-com startups have even had time to think much about - getting lots of things to lots of people in different places, efficiently. To be fair, UPS competitors like Federal Express and DHL are also good at that. It's why they exist.

But only UPS has managed to get much of that internet glitter to rub off on it.

It must have been deeply tempting to sit back and wait for business to grow and grow as the internet economy took off. More and more parcels are being delivered to more and more homes all the time, and to all those dot-com companies by their suppliers. Business would have boomed, as it has done for all the courier and delivery companies. But it would not have made UPS a player, and UPS wanted to be a player.

It "got the internet" early on. It was the first delivery company to introduce online package tracking, in May 1995. It was, in the sea of chairmen's statements and brochureware that characterized corporate home pages at the time, an application that was - wonder of wonders - really useful. And people used it. By December, UPS was getting 100,000 online tracking requests a month. It very quickly introduced other online utilities, such as cost and time-in-transit calculators, a drop-off locator and online pickup requests. But it was the tracking that got the traffic.

The way Joe Pyne, UPS's senior vice president of corporate development, tells it, there was no road-to-Damascus moment of truth for UPS. "The company has changed itself several times in the past 92 years. It started out mainly as a retail delivery service, then commercial, then started the air business, then went international. We do lots of research into where the world is going. We understand our own internal capabilities and what technology can do for us. We wanted to reduce costs and improve service, and do the same for our customers." It's all so logical really.

No baffling internet-speak about paradigm shifts and overturned business models. That's just not the sort of thing you'd expect from guys who dress in brown.

But there has been a shift in thinking, which Pyne acknowledges. "The internet is like the industrial revolution all over again. Power is moving closer to the consumer, and people who can change their business models to move closer to the consumer have the best potential for continued growth."

Well, that's what everybody says, isn't it? But hold that thought, as we continue to look at what UPS has been doing.

Once UPS had decided the net was the thing, it jumped in with gusto, and astutely. It started with such simple things as being the first transportation company to advertise online, at a stage when about the only credible online advertising environments were the search engines. Oh, and the odd newspaper and online magazine like HotWired, but they were hardly reaching UPS's target market.

It formed what at the time - early 1997 - were key relationships with Lycos, Infoseek and Yahoo!. Every page Yahoo! and Infoseek delivered had a UPS link to a co-branded bridging page with downloadable software tools for businesses. On Lycos, the integration was even closer.

Users could track parcels by entering their numbers directly into the search engine query window.

No big banners, just things that would show people what UPS could actually do online. On Yahoo!, the links were simply text. The idea, says Pyne, was not simply to be on the web but of the web. And instead of trying to get people to come to UPS, it tried to get as much online functionality as possible out to where people were already going online.

When UPS struck its search engine deals back in early 1997, it was taking advantage of a limited window of opportunity. It was prior to the high-priced deals that Amazon struck with the major portals later the same year, which changed the field for everybody and made exclusive portal partnerships a game for those with very deep pockets. Not that UPS doesn't have deep pockets. It's just that it didn't have to dig into them nearly as deeply as those who came afterward. It was able to offer the search engines something they badly needed at the time - the credibility of a major advertiser.

In return, UPS got massive reach, at least in internet terms. It saw online parcel tracking increase exponentially, to a million a week by the end of 1997 and a million a day by the end of 1998. It served to identify UPS with the net at a very early stage.

On a less superficial level, though, the internet fitted well with the makeover - not a dot-com one but certainly a hi-tech one - that UPS has been undergoing for some time. It has spent $10 billion on information technology over the past 10 years - more than it has on trucks or airplanes. Moving lots of stuff around is not so much about people and wheels as it is about people and information, and the ability of those people to get at the information. The internet simply means there is much more information for everyone in the chain, much more quickly.

People who have been around for a bit longer than most dot-com entrepreneurs, especially people in the big manufacturing companies, will tell you there is nothing terribly new about e-commerce. They'll talk wistfully about electronic data interchange (EDI), which made a lot of supply chain simplification and integration possible for big companies in the 1980s and early '90s. The problem was, EDI was too big an investment for most small or medium-sized companies.

Where the internet comes into it is that it makes those advantages available to many more companies, especially the smaller ones who could never have afforded the investment in traditional EDI. "The web levels the playing field," says Pyne. "Small companies can act big and big companies can act small. The internet made it easier for more people to improve internal processes or to move information to suppliers or consumers."

Having easy access to information about exactly when a package has been delivered and to whom means that companies can speed up their accounting processes, triggering the collection of bills much more quickly and improving their cash flow. It can go further than that. When the guy in brown hands you a pen and asks you to sign your name on a glass screen, that can trigger payment to the supplier. The process of delivery, matching purchase order with invoice, approving and triggering payment, is all compressed into a single electronic moment. Accounting cycles that once took 40 to 60 days can be reduced to as few as four to 10 days.

And guess who makes this possible? The guy in brown with the pen, of course. UPS is still the only delivery company that captures recipients' signatures electronically. For the companies who benefit from this, UPS is the enabler, the older brother, arm-around-the-shoulder partner that is helping them to be more profitable. And it's those kinds of arguments that are the real ammunition in the battle between delivery companies.

The thing about the internet that makes it easier and cheaper to achieve what you used to have to make big investments in proprietary software to achieve, is that it is a collection of open standards. Openness is what makes the net such a powerful tool. Anyone can use it. It's a valuable lesson UPS has taken to heart in its own business.

There is no proprietary software that you have to buy in order to benefit from the information UPS can provide when it delivers your packages. If you need software, it will give it to you. Just download it from the web site. In many cases, you may find that UPS is already there in the software that you're using. UPS has over the past three years formed more than 100 relationships with software suppliers, from IBM and Harbinger (web site building) and Pandesic (e-commerce enablement), to Peachtree (accounting software), Oracle and Peoplesoft (both enterprise resource planning).

"We want our functionality to be embedded in the functionality of their software. We're putting it right into the order cycle and the supply chain," explains Pyne. "We want to be where business is taking place; that means being embedded in the software where business is conducted."

What all of this does, of course, is make it much harder for UPS to be replaced once a customer comes to rely on the functionality. And that will be the case until competitors like DHL and FedEx start similar deals offering the same thing, with the ability to change seamlessly from one supplier to another.

This is bound to happen, but UPS has a bit of time, and, if judged by past performance, the know-how, to solidify its position.

It wants to be ubiquitous, in the same way that Microsoft's Windows operating systems are ubiquitous - or almost so - on desktop computers. For instance, if you're a small business using Harbinger's Instant Net Presence to create a modest e-commerce web site, the UPS functionality is already there.

Of course, it's not just at the start of the order cycle that UPS wants to be present. One of the earliest uses of the internet by delivery companies was parcel tracking. Turning what used to be a necessary but tedious and expensive service into what effectively amounted to self-service delivered over the internet enabled the likes of UPS and Fedex to make massive savings in the cost per tracking query. And guess what? Customers perceived it as an improvement in service, giving them greater control and access.

UPS doesn't only provide package tracking information on its own site.

By matching retailer order numbers with its own tracking numbers, it can let the information be pulled into the retailers' own sites. As far as the end customer is concerned, it's the retailer providing the tracking.

All this has paid off handsomely. UPS is quite literally the wheels of e-commerce. It delivers nearly 60 percent of all consumer goods ordered over the internet. It is the company that gets its hands dirty by delivering on the promises of many of the biggest internet retailers. UPS drivers are, in a very real sense, the front line of the new economy. They cross people's thresholds with parcels from Amazon, Dell, Nike.com, Pets.com, BarnesandNoble.com and many other retailers. In most cases, the UPS driver is the only human contact customers have with the sites on which they placed their orders.

When you look at it like that, it's not surprising UPS didn't just have an IPO. It had an internet IPO. Come to think of it, brown is not such a bad color after all.

ALL THE RIGHT NUMBERS

92-year-old UPS is the world's biggest delivery company, employing 340,000 people worldwide and delivering on average 12.5 million packages a day to consumers. On December 17 of last year, the volume peaked at 18 million for a single day.

In 1999, its revenue was $27.1 billion.

It is also, by far, the delivery company that has benefited most from e-commerce, delivering nearly 60 percent of consumer goods ordered over the net. That's about the same as UPS's overall share of the US parcel delivery market - up from just a four percent market share in 1977.

To do that, it runs 149,000 tractor-trailers, delivery trucks and vans.

There are also approximately 600 planes, making UPS one of the world's biggest airlines.

And for the past 10 years it has invested nearly a billion dollars annually in information technology to track those parcels.

HOW DOT-COM PLAYS POSITION UPS AS A BUSINESS ENABLER

The internet has played an immense role in adding attributes to the UPS brand. These days, brown is no longer just the color of a delivery company. It's the livery of a business enabler. Many of its customers and potential customers see it as a high-tech company that can help to solve their problems, just like an IBM or an Oracle. Except IBM and Oracle can't deliver the goods for you as well. It means that UPS's business is extending in new and sometimes unexpected directions.

You don't get delivery companies dispensing advice on e-commerce. But that's exactly what UPS is doing with its ec.ups.com web site. It's a step by step guide, aimed at small businesses and start-ups. There's a strong sales pitch in there, of course, but it's also full of downloadable software tools, not just for tracking, but also for things like address validation, electronic manifesting, and reliable rate and time-in-transit calculators.

And you can't get much more enabling than by providing the finance that companies need in order to do business in the first place. This is what UPS Capital Corp does. It finances inventory and equipment purchases for small- to medium-sized companies, as well as providing international trade finance and account factoring, among other things.

"We can do it because our brand is so strong. Brand is all about keeping your promises. High integrity is the foundation," says Joe Pyne, UPS's Senior Vice President of Corporate Development. "That's why customers are willing to trust us to do this stuff, and why we can open more financial doors than some banks can."

And now it's investing in new businesses too, through its recently-formed subsidiary UPS e-Ventures. E-Ventures' purpose is the research, development and incubation of new businesses related to supply chain management and e-commerce.

But the most dot-com-like of all UPS's new ventures is one that, in true internet fashion, attacks a core part of UPS's existing business - moving documents around. If it's possible to put what you need to send in digital form - a contract, say, or a tender - the UPS Document Exchange will do electronically what its parent company does with brown trucks. The idea is that it should be as convenient as email, but with the same extras that make people send important documents by courier instead of the post.

You can prove they came from the person it says they came from. You know exactly who received the documents.

UPS's approach to marketing Document Exchange is also very dot-com-like: it is all about striking relationships that help generate the business.

FROM AWARENESS TO BRAND: UPS's evolving online marketing

The original driver behind UPS's online marketing was to achieve massive reach. In its pioneering relationships with search engines back in 1997, it sacrificed large banner spaces for relatively small icons.

On Yahoo!, it was just text links.

The company reckons its two-year relationship with Yahoo!, Lycos and Infoseek in 1997 and 1998 delivered more than 16 billion impressions.

These days, it can afford to be both more sophisticated and more targeted.

Instead of being all over the portals, the aim now is to have a presence in targeted small business areas on those sites. The reach is smaller, but overall online marketing spend has increased. One reason is that targeting generally costs more. The other is that online media owners are now much more aware of the value of serving different content areas. Some areas do also get sold out.

Current sites where UPS advertising is running include the business-to-business site Thomasregister.com and ESPN, where online advertising is tied in with UPS's sponsorship of the NFL.

A lot of UPS's choice of online advertising sites these days has more to do with brand than with reach. Some sites may be less effective in producing clicks, but they're still worth the investment if by being on them it contributes to brand and positioning, says UPS.

The media landscape has also changed over the past few years to give lots more opportunities for advertisers to convey more sophisticated branding messages across multiple media. The choice is no longer between spending your money on or offline. With many media owners you can now do both, with the same number of dollars.

UPS's sponsorship of ZDTV's weekly half-hour show Working the Web is closely integrated with its presence on the ZDTV web site. For instance, internet companies submit details of their businesses in a competition to be named "Merchant of the Week" on the program. But first, the users of the site have to vote on which of the finalists will get featured on-air. Recent winners have included Envelopes Direct, and Autosupermart.

The show is perfect for the kinds of associations UPS wants to build around its name. It has taken a similar content-led approach to its association with Inc.com through its sponsorship of the Going Global area on the site, aimed at startups and small businesses planning international expansion.

To manage its online advertising, UPS also became one of the early users of third-party ad serving. Instead of leaving it up to the media owner from whom you've bought the impressions to serve the ads, third-party serving allows advertisers to take control not only of the serving of the ads themselves but also, more importantly, the monitoring. It was this accountability that, for UPS, swayed the decision to go with third-party serving.

HELPING THE DOT-COMS KEEP THEIR PROMISES

When Amazon.com started expanding its network of distribution centers, it turned to UPS for help in deciding where to locate them. You'd expect that, since UPS is Amazon's distribution partner. But for many internet retailers, UPS won't just provide advice. It will do the whole thing.

Along with traditional and new competitors such as Federal Express and SubmitOrder.com, UPS is providing a complete outsourced logistics and supply chain function for clients such as Nike.com and Boo.com.

The service can include everything from managing orders and inventory, warehousing, order management and the picking, packing and dispatch of orders right through handling returns and even providing the customer service call centers.

The company recently launched another subsidiary, UPS e-Logistics, geared specifically toward online retailers needing to get up and running quickly with an outsourced supply chain management and delivery system.

"So many startups and smaller companies concentrate on developing their web sites and never really attended to the back and fulfillment - where they're going to source goods from, their distribution network, where the customers physically are, third-party fulfillment," says UPS communications manager Susan Rosenberg. "We've had to coach and counsel a lot of customers through change."

In other words, for many virtual companies, UPS is the bit that's real.

A BRIEF HISTORY OF UPS ON THE NET

December 1994: Establishes home page (www.ups.com)

May 1995: Introduces online package tracking and time-in-transit calculator for US ground shipments

December 1995: First 100,000 online tracking requests per month

March 1996: Introduces online pickup requests

July 1996: Introduces online drop-off locator, with maps to more than 70,000 locations

August 1996: UPS web address appears on delivery vehicles

October 1996: First million online tracking requests per month

April 1997: Introduces downloadable internet tools

December 1997: First million tracking requests per week

December 1998: First million online tracking requests in a day

October 1999: Offers free internet access to customers in partnership with Microsoft and AT&T

November 1999: UPS's IPO is the biggest ever, raising more than $5.47 billion on the stock market

December 1999: First 2.5 Million online tracking requests in a day;

UPS enters financial services market with the launch of UPS Capital

January 2000: Signs up internet grocery delivery companies Albertsons.com, GroceryWorks.com, HomeGrocer.com and Streamline.com to use UPS's Roadnet delivery management software and hardware.

February 2000: Launches UPS e-Ventures, aimed at identifying and investing in the rapid development of new business related to supply chain management and e-commerce.