Verticalnet reaches for new markets
The company releases a new version of its business software that is designed to facilitate transactions among business partners, as it attempts to distance itself from its former market identity.
The release of the enhanced applications, which incorporates software the company gained in the acquisition of Atlas Commerce last year, follows the sale of Verticalnet's online marketplace unit to Corry Publishing last month for $2.35 million. That sale closed a chapter in the company's storied history in which it launched nearly 60 web sites but saw it fizzle as a business model.
As a player in the frenzied business-to-business e-commerce market, the company's stock price briefly soared above $130 a share in the heyday when the Internet bubble reached its peak in 2000. But with Verticalnet shares hovering in the neighborhood of $1 since last summer, the company hoped its move into the business applications market would revive its prospects. Unfortunately, that move comes in the middle of a brutal market for business applications that has sent the company's revenue into decline.
To improve its financial picture, Verticalnet said last week it had bought back all of its Series A preferred stocks and accrued dividends for $5 million, thereby eliminating $106 million from its corporate balance sheet. Verticalnet's board also approved a reverse stock split that would convert 10 shares of its common stock into one share, effective July 15.
With former SAP executive Kevin McKay now leading the company, Verticalnet has managed to shrink its losses but still faces challenges as a fledgling software company. Along with dampened demand for business productivity software, the company faces competitors with considerable staying power, including SAP, PeopleSoft, Oracle and Ariba.
Former Verticalnet Chief Executive Mark Walsh, who left in 2000, is now the technology advisor to the Democratic National Committee. Walsh's successor as chief executive, former Amazon.com executive Joe Galli, is now the head of durable goods maker Newell Rubbermaid, a post he took after just five months at Verticalnet.