Viant's IPO jumps, AppNet fizzles

Larry Dignan
2 min read

In a tale of two e-commerce consultants, Viant Inc. (Nasdaq: VIAN) had a much better market debut than rival AppNet Systems Inc. (Nasdaq: APNT). Viant surged as high as 29 1/2 before closing at 24 3/8, up 7 5/8 from an opening price of $16, but AppNet stayed flat at its opening price of $12.

Viant's original price range was $10 to $12 a share. Goldman Sachs was the lead underwriter. Credit Suisse First Boston was the lead underwriter for AppNet.

Both companies are hoping to cash in like iXL Enterprises Inc. (Nasdaq: IIXL) did in its debut last month. The Internet consultant to Fortune 1000 companies such as General Electric and Time Warner watched its stock jump from $12 a share to $24 a share shortly after its IPO last month.

Viant and AppNet, like iXL, are Internet e-commerce services companies. The goal for both companies is to show customers how to use the Internet as a weapon via the cliche "business solutions."

AppNet and Viant want to offer clients one-stop shopping. The companies will design a site, craft an e-commerce strategy, offer the back-office tools, and then help clients to promote it.

Both companies have the typical Internet IPO losses and see red for "the foreseeable future."

For 1998, AppNet, which has bulked up via acquisitions, reported pro forma sales of $69 million and a loss of $73.8 million. For the quarter ending March 31, AppNet reported pro forma sales of $22.2 million and a loss of $15.4 million.

Some of AppNet's 200 or so customers include: Multex.com, Ciena, Sony Electronics, Ford Motor Credit and Unilever. AppNet, founded in 1997, has built itself up via acquisitions of 12 different technology service providers since March 1998.

In regulatory filings, AppNet said it will use the funds from its IPO to expand its infrastructure, integrate acquired companies and pay down debt.

Viant, which has 246 employees, is very similar, but has grown organically instead of using acquisitions. The potential acquisition pitfalls are removed, but Viant still loses a lot of cash. Viant reported sales of $20 million for 1999 and a loss of $6.4 million. For the quarter ending April 2, Viant reported sales of $7.8 million and a loss of $2 million.

The company also boasts some impressive customers including Compaq and Lucent, but like AppNet competes with US Web (Nasdaq: USWB), Razorfish (Nasdaq: RAZF) and iXL among others.

AppNet and Viant do differ when it comes to charging customers. Viant offers fixed-price and time contracts while AppNet bills in terms of time, materials and expenses incurred. AppNet, however, is migrating to fixed pricing.