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VerticalNet shares jump on Microsoft investment

The business-to-business e-commerce provider's shares rise 25 percent after it nabs a $100 million investment from the software giant.

Shares of VerticalNet today jumped 25 percent after the business-to-business e-commerce provider nabbed a $100 million investment from Microsoft.

In early morning trading, VerticalNet saw its shares advance $49.44 to $243, setting an all-time high.

Horsham, Pa.-based VerticalNet, which operates and owns about 55 industry-specific business-to-business (B2B) trading exchanges that enable companies to buy and sell goods and services online, said it will work together with Microsoft to jointly sell B2B e-commerce services and content to small and medium-sized businesses.

More and more companies have been investing in a B2B strategy as the heavily touted space continues its upswing momentum. Microsoft is joining a growing list of software companies, including Oracle, SAP, JD Edwards and others, that have recently tapped the lucrative B2B market as competition escalates against pioneers Commerce One and Ariba. A number of analyst firms have projected that the B2B market will reach the trillion-dollar mark by 2003.

Microsoft, which did not disclose the size of the equity stake it has taken in VerticalNet, also recently made investments in the application service provider (ASP) market, another fast growing space. Earlier this month, the Redmond, Wash.-based company invested $10 million in ASP start-up Corio. Last September, Microsoft made a $67.5 million investment in ASP and Internet consultancy USWeb/CKS to fund the development and marketing of new application services and technologies for their joint customers.

As part of the alliance, Microsoft said it will provide VerticalNet with distribution and marketing support through multiple Microsoft products, including the MSN network of Internet services, Microsoft bCentral small-business portal, and, the companies said in a statement.

In addition, VerticalNet, which runs trading exchanges for the technology, communications, food and other vertical industries, said it has also agreed to use Microsoft platforms that support its own framework and Web sites including upgrading to the Windows 2000 operating system and using the Microsoft SQL server.