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AppNet, MCI WorldCom to combine services

The Internet services firm partners with the telecommunications giant to jointly sell products and services to corporate customers.

Internet services firm AppNet said today it has partnered with telecommunications giant MCI WorldCom to jointly sell products and services to corporate customers.

Bethesda, Md.-based AppNet provides customers with interactive marketing, back-end system integration, and consulting services. The company said it will combine its offerings with MCI WorldCom's broadband Internet access services.

Shares of AppNet climbed 16.1 percent, closing ahead 7.25 at 52.25 at the end of the trading day. Shortly after the opening bell, AppNet saw its shares jump nearly 20 percent on news of the deal, while MCI WorldCom closed down 2.44 at 49.5.

Analysts at First Union Securities raised their stock rating on AppNet to "strong buy" from "buy" and upped their 12-month price target to $72 a share on the strength of the MCI WorldCom deal.

Financial terms of the deal were not disclosed.

The combined services, which will be sold under the MCI WorldCom brand, will help position MCI WorldCom and AppNet to deliver services into the fast growing business to business (B2B) e-commerce market, helping clients set up trading exchanges or marketplaces online, the two companies said in a statement.

In recent weeks, there has been tremendous activity in the heavily touted B2B market. More and more services firms, including professional services giant EDS, along with management consultancies Andersen Consulting and KPMG, have been jumping into the lucrative market, a market that Forrester Research has projected to reach $1.52 trillion in 2003 from about $131 billion in 1999.

Both AppNet and MCI WorldCom are dedicating sales and marketing staff to serve the agreement. Under the terms of the deal, AppNet said it will offer custom applications as part of MCI WorldCom's total e-business offering.

"This agreement with MCI WorldCom will drive AppNet's services to an even wider client base of global corporations, " AppNet chief executive Ken Bajaj said in a statement.

Founded in 1997, AppNet, which competes against other Web services firms, such as Agency.com, Breakaway Solutions, Proxicom and a host of others, said its client base consists mainly of Fortune 1000 companies and upstarts, such as communications company Sprint, auto maker Ford and Baxter Healthcare.