Ducati Motor Holding SpA has come roaring back almost as fast as one of its exotic racing bikes.

The Italian motorcycle maker, which came close to bankruptcy in 1996, has accelerated its sales largely by making plenty of marketing noise. Its messages fairly scream, with words such as: "Exclusive." "Legendary." "Stunning." "Cool." "Defiant." The focus on marketing reinvigorated a bad-boy brand that has attracted the likes of actors Laurence Fishburne, Arnold Schwarzenegger, and Sylvester Stallone, and rap musician Sean "Puffy" Combs. For trendy, spare-no-expense glitterati (and wannabes), Ducati motorcycles have become must-haves.

But what has been lost amid the noise and flash has been the crucial role that the Internet has played in reviving sales. When the company experimented with the Web a few years back and offered a run of limited-edition bikes online, it found demand explosive. The entire run of 500 high-end motorcycles sold out in half an hour, even though the sale began at midnight Italian time. Since then, the company has been finding more and more ways to exploit the demand that it seems to find more readily online than through its dealer network.

So far, the only major problem has been keeping up with the rising flood of online orders.

"This is a great example of a relatively small company that has become a truly global brand," says Louis Bailoni, a motorcycle-industry analyst with ABN AMRO Holding NV. "Ducati has used the Internet to raise its brand better than any other manufacturer, including Harley-Davidson Motor Co.."

Federico Minoli, Ducati’s chief executive, says: "The Internet has transformed the way we do business. What started out as a fun tool has grown into a [big] enterprise."

Ducati has always enjoyed a fanatical following because it has been a sort of Disneyland of speed. The venerable Italian fabricator of hand-made racing bikes has dominated track competition for a decade. It has won nine of the past 10 World Superbike Championships, a grueling series of 190-mile-an-hour races held over a six-month season. Hallways at the corporate headquarters in Bologna, Italy, are fairly littered with photographs of famous Ducati racing bikes and memorabilia from important races that the company’s bikes have won.

Ducati bikes cost anywhere from $6,000 for a stripped-down street machine to $35,000 for a custom racing bike and are described by those who love them as works of art rather than road machines.

But, like many a company obsessed with a product, Ducati traditionally has been better at engineering than at management. The company—which was founded in 1926 as a maker of small electrical appliances, then switched to motorcycle production in the transport-starved postwar years—long suffered from aging assembly lines and chronic underinvestment. By 1996, then-owners Claudio and Gianfranco Castiglioni had racked up $70 million in debts, equal to more than half the company’s sales that year.

While the Castiglioni brothers had carried on the tradition of building great Ducati products (winning the Superbike championships from 1991 to 1995), they were unable to pay suppliers. Parts stopped arriving at the Ducati factory. Annual production plunged to just 12,500 motorcycles in 1996 from 21,000 the previous year.

The Castiglionis hurriedly negotiated a sale of 51% of the company to U.S. buyout specialists Texas Pacific Group in September 1996. A buyout of the brothers’ remaining interest followed in early 1999.

Minoli, who studied business at Johns Hopkins University, and was a consultant with Bain & Co., was recruited in 1996 as acting chief executive. "It was a complete mess," he remembers. "There was no management information system, no purchase or credit controls of any kind, and we didn’t have a single personal computer in the whole company. I signed millions of dollars worth of checks during the first week so the suppliers would start working for us again."

Quickly hiring a new team of Italian and American managers, Minoli initially set about radically re-engineering the way Ducati made motorcycles. He upgraded archaic production lines, introduced sophisticated computer modeling and design systems, and outsourced 90% of production to Italian specialist engineering companies. The company estimates that its efficiencies cut manufacturing costs 27%. In addition, the company now can fulfill 95% of orders for standard motorcycles within a few weeks, up from only 65% three years ago.

Minoli, 51 years old, also pumped money into marketing. In the past, Ducati had largely relied on word of mouth to transmit the passion for its machines in or around the racing circuit. Minoli changed all that by opening trendy Ducati stores for bikes, accessories, and apparel in London, Paris, Brussels, Rome, Frankfurt, New York, Miami, Seattle, and 28 other cities.

His breakthrough, though, came in 1998, when Ducati built a Web site and started marketing its bikes and racing prowess online. The results were immediate and startling. For instance, Ducati posted information about a bike rally in its headquarters city of Bologna. It expected some hundreds of people to attend. Instead, 11,000 showed up. Ducati staff members were stunned. The group occupied all the hotel rooms in the area and arranged to take over the local Bologna racetrack for the rally. When the gala weekend was repeated last June, 25,000 made the scene. Some partygoers were forced to sleep in tents.

With the Web seeming to hold such promise, Ducati began taking orders online in November 1999. Minoli and his team drew attention to their e-commerce efforts by offering a brand-new special edition of 500 Ducati MH900e motorcycles in a sale that took place exclusively online. It was a good choice. The MH900e is the sort of full-blooded custom racing bike that makes enthusiasts salivate—commemorating former world racing champion Mike Hailwood and the motorcycle he drove in 1978. "A motorcycle like that is like nothing else you’ve ever ridden," says recently retired motorcycle racer Carl Fogarty, the only rider ever to win four World Superbike titles, all of them on Ducatis. "It looks different. It sounds different. It’s unique—like a two-wheeled Ferrari."

To mark the new millennium, the MH900e went on sale at the stroke of midnight on the morning of Jan. 1, 2000. By 12:31 a.m., all 500 bikes had been sold, at $15,000 each.

In the following days, Minoli says, Ducati received 10,000 calls and e-mails asking that Ducati extend the MH900e’s production run. The company agreed to expand production to 2,000. (Any more, it was feared, might anger earlier buyers, who had been promised a limited-edition bike.) The new allotment sold out within three weeks.

The MH900e won such a cult following that Ducati quickly began designing new generations of special-edition bikes for Internet sales. Ducati saw how little sensitivity online buyers showed to price the first time, so the company offered a far more expensive bit of racing technology the next time. Ducati struck pay dirt again last September, when it offered the $35,000 Ducati 996R in another exclusive online sale. This time, all 350 bikes were sold in less than eight hours, producing more than $12 million in revenue.

Those two quick online sales, totaling $42 million, equaled more than half of the sales increase that Ducati had last year, when revenue rose 29% to $353 million, from $273 million the prior year. While management doesn’t disclose Ducati.com sales separately, it appears the division sold perhaps $5 million more in accessories and apparel. So, total e-commerce sales accounted for roughly 13% of revenue, even though the e-commerce operation was just a month old when 2000 began. Partly because of the profitable online sales, pretax profit totaled a healthy 16% of revenue.

"We were amazed to see that this was turning into a great business for us," Minoli says. "I mean, we were selling a whole year’s production run in advance." In addition, because Ducati required that buyers make a deposit when ordering bikes online, the company was getting 10% of the sales months in advance of delivering the bikes.

With supply lines open again, with marketing in full force, and with online sales providing a bonanza, Ducati has more than tripled production since 1996, reaching 39,000 bikes last year. The company sees the momentum continuing, too; it expects that number to reach 70,000 within a few years.

Ducati’s online efforts appear to be an ideal fit for the audience it has built up over the years. Specializing as it does in high-speed racing motorcycles, Ducati attracts a younger and more aggressive rider than the typical 40-something enthusiast who prefers, for instance, Harley-Davidson’s "hogs." "Harleys are for old guys who want to feel young," a Ducati worker dismissively says. "Ducatis are for young guys who like to go fast." The average age of a Ducati rider is 32, management says. The average income? A lot.

Chiara Tirloni, an Italian analyst covering Ducati for investment bank UBS Warburg, says: "It has a strong brand and an excellent, impulsive, and wealthy client base. It’s perfect for the Internet."

Ducati also benefits, oddly enough, because it never succeeded as much as competitors did in building extensive networks of dealers. Ducati doesn’t need to worry so much about appeasing dealers who fear they will be cut out of the loop.

Ducati is still careful with dealers. The company sells all its standard, noncustom models exclusively through dealers and pays them a commission on any online sale of a custom bike coming from their area. But, it mainly relies on the compelling argument that the special editions it sells online wouldn’t work in the dealer network. With production runs ranging from 300 to 2,000 of these expensive racing bikes, there aren’t enough of them to spread around to hundreds of dealers.

Other motorcycle makers, by contrast, worry so much about offending dealers that they are taking only baby steps toward online sales of bikes. Harley-Davidson, whose annual production has doubled to 203,000 bikes since 1995, has developed a wide range of online events and contests and has done a great job of marketing its brand to affluent baby boomers over the Internet. BMW Group and the big Japanese manufacturers are using the Web to promote events, market their products, and sell accessories. But that is as far as any Ducati competitor seems comfortable going.

The threat of dealer backlash has stopped Harley-Davidson from even selling accessories and parts direct to consumers. All sales aside from clothing are routed through the franchised dealerships, according to Harley Communications Director Joe Hice. "The dealer isn’t just a business office," he explains. "It’s where you go for coffee and doughnuts Saturday morning before the hog ride starts. We didn’t want to mess with that."

The 64,000-rpm question is: Can Ducati.com continue to grow over the next few years?

Absolutely, if you believe Ducati’s head of new projects and products, David M. Gross, a 34-year-old who came up with the idea of selling limited-edition custom bikes over the Internet.

"We dramatically underestimated the market for the MH900e," he muses. "We could maybe sell editions of as many as 3,000 or 4,000 bikes." Even 3,000 bikes at $20,000 apiece would create a revenue stream of $60 million. Double that with two editions a year, and it means a 30% increase in total sales. Add to that perhaps $20 million in online apparel and accessory sales, and you have a $140 million-a-year business online.

Gross thinks sales could keep growing, as Ducati builds ever-more-intimate relations with its customers. He foresees a time soon when Ducati and a group of online customers will agree on the design, specifications, and production run of new editions. Already, e-mail suggestions are solicited for new features and performance requirements.

With rabid fans ordering up more exotic forms of fantasy fulfillment, Gross says, "This is going to make the customers an integral part of the product-development process."

You can see him mentally gunning Ducati’s engine to an even more deafening roar.

Evans is a London-based writer and consultant specializing in the strategic and financial implications of the New Economy. He has written for a wide range of magazines and journals on both sides of the Atlantic and can be reached at vision@evansnet.demon.co.uk.