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Internet Capital streamlines its e-business collective

The e-business incubator sells off two of its holdings and combines two others in an effort to reshape its network of companies.

    The e-business incubator Internet Capital Group has sold off two of its holdings and combined two others in an effort to streamline its business-to-business e-commerce network of companies.

    The Wayne, Pa.-based company said Tuesday it has sold its stake in Servicesoft to Broadbase Software and its stake in eChemicals to Aspen Technologies. It also announced the merger of FreeBorders and Applied Intranet Technologies, which are part of its business-to-business partner network.

    For its stake in Servicesoft, Internet Capital received approximately 1.3 million shares of Broadbase common stock, worth $10.2 million at the close of the transaction. The company said it originally paid $3.8 million for its stake in Servicesoft.

    Details of the eChemicals sale were not disclosed, but the deal follows Internet Capital's write-off of eChemicals during the third quarter of 2000, the company said.

    Other details were not disclosed.

    The merger unites FreeBorders, a maker of supply chain software for the apparel, textile and retail industry, with Applied Intranet Technologies, a provider of collaborative software.

    In November, Internet Capital, IBM and others made a $25 million investment in FreeBorders despite congestion in the business-to-business sector and investor shyness in the market.

    The merged company will create Web-based technology for the apparel industry to enable trading, development and communication among business partners. Internet Capital will maintain 38 percent ownership of the newly merged company.

    Financial details of the merger were not released.

    The move follows months of skepticism by Wall Street analysts who criticized the company for losing its way and continuing on an acquisition spree despite weak markets.

    But Internet Capital sees promise still in its 5-year-old business plan. "We continue to provide the tools to build...B2B companies, while simultaneously tightening our network into a lean group" of companies poised to deliver B2B e-commerce, Walter Buckley, chief executive officer of Internet Capital, said in a statement.

    The company first made mention of its streamlining efforts when it reported its third-quarter earnings in December. In mid-November, Internet Capital, whose stock now hovers around $6, said it was making a 35 percent staff cut. The stock's 52-week high was about $201.